TCS, Infy, HCL Tech gain 2%; IT index up 5% in 1 week ahead of Q2 results

However, thus far in the calendar year 2025, the IT index has underperformed the market by falling 20 per cent, as against 4.7 per cent rise in the BSE Sensex

Information Technology (IT) stocks today

 

Shares of information technology (IT) companies were in focus on Wednesday with the Nifty IT index and the BSE Information Technology index gaining 2 per cent each on the bourses. With this, the indices have extended their up move into a fourth straight trading day.

 

In the past one week, the BSE IT index has outperformed the market by surging 5 per cent as compared to a 2-per cent rise in the BSE Sensex. Still, the IT index remains an underperformer thus far in the calendar year 2025 as it has fallen 20 per cent year-to-date, as against 4.7 per cent rise in the benchmark index.

 

 

At 09:34 AM, shares of Tata Consultancy Services (TCS), Infosys, Tech Mahindra, LTIMindtree, HCL Technologies, and Mphasis were up 2 per cent each. In comparison, the BSE Sensex was up 0.28 per cent.  ALSO READ| Titan shares advance 4% as Q2 update surpasses expectations; time to buy? 

Indian IT sector outlook

 

IT services are experiencing a slowdown in demand growth from their primary market, the US, while the transitional phase of generative AI adoption is expected to delay clarity regarding service growth, according to analysts.

 

The sector, they believe, is anticipated to report moderate growth in the July-September quarter (Q2FY26), driven by a lack of improvement in demand, a steady deal pipeline, and uncertainties in macroeconomic conditions such as Trump tariffs, H1-B visa restrictions, the proposed US HIRE bill, and the ongoing trade war.

 

Notably, over the last few quarters, clients of Indian IT Services companies have been reducing IT budgets due to economic uncertainty, particularly in the US and Europe. Large enterprises continue to focus on cost optimisation, leading to higher cost take-out deals, vendor consolidation, and reduced headcount costs.

 

Industries such as BFSI, Hi-tech, and healthcare services are likely to sustain their recovery, while Manufacturing, Retail, and other verticals are expected to remain subdued. However, deal momentum in these industries is likely to remain strong despite volatility in demand. Steady growth in resilient verticals and deal ramp-up should partially offset weakness at the broader level this quarter, according to Axis Securities.

 

The recent price correction in large- and mid-cap stocks has created an attractive risk-reward setup for investors, with valuations turning more reasonable and offering fresh opportunities, the brokerage firm said.

 

"Our initial assessment indicates that the impact on margins is likely to be around 40–200 bps, assuming the similar new H-1B filings (which we believe will come down drastically ahead)," analysts at ICICI Securities said.

 

Nonetheless, the brokerage firm expects near-term overhang in stock prices as investors price in protectionist risks. Structurally, the move will accelerate operating model changes towards higher local/nearshore hiring and greater offshore delivery, akin to Covid-era remote delivery pivots. Analysts said they will also monitor if the order faces any challenge in US courts and await commentary from the companies on quantifiable impact (if available) to bake into estimates.

 

Motilal Oswal Financial Services, meanwhile, remains Neutral on Technology sector, within which they are underweight on IT services but over weight on quick commerce, which offsets the services underweight. Within IT services, the brokerage firms said they continue to prefer mid-cap players owing to their better growth vs. the large-cap peers. Coforge and Hexaware are key mid-cap IT picks with unchanged allocation at 200bp. TechM is the sole large-cap IT name in the brokerage firm's portfolio.

 

TCS Q2 2025 results on October 9: What to expect?

Meanwhile, Tata Consultancy Services (TCS) is set to kick start the Q2FY26 results season with its quarterly earnings report on Thursday, October 9, 2025.

 

According to analysts' estimates, the Tata Group company may report just 2.7 per cent quarter-on-quarter (Q-o-Q) rise in revenue to ₹65,150.30 crore amid reduced contribution from the Bharat Sanchar Nigam Ltd (BSNL) project.

 

Further, the company's net profit could decline by 0.32 per cent Q-o-Q to ₹12,719.13 crore amid heightened global uncertainty in the demand environment. READ PREVIEW HERE