Nifty IT index gains 3.5% on Friday as TCS jumps 4% post Q1FY27 results

At 09:38 AM on Friday, the Nifty IT index was the top gainer among sectoral indices, up 1.8 per cent, as compared to a 1 per cent rise in the Nifty 50.

Information technology (IT) shares price movement

 

Shares of information technology (IT) companies were in demand with the Nifty IT index soaring over 3 per cent on the National Stock Exchange (NSE) in Friday’s intra-day trade after sector giant Tata Consultancy Services (TCS) reported a stable June 2026 quarter (Q1FY27).

 

Nifty IT index was up 3.5 per cent to 28,439.55 in intra-day deals. At 09:38 AM, the Nifty IT index was the top gainer among sectoral indices, up 1.75 per cent, as compared to 1 per cent rise in the Nifty 50. With today’s gain, Nifty IT index recovered 11 per cent from its 52-week low of 25,699.10 touched on July 1, 2026.

 

 

LTM, TCS, Infosys, Emphasis, Tech Mahindra, Persistent Systems, HCL Technologies and Coforge surged in the range of 4 per cent to 5 per cent, while Oracle Financial Services and Wipro were up 3 per cent each.

 

TCS surges 4% on stable Q1 quarter

 

Share price of TCS gained 4 per cent to ₹2,133.30 on the NSE in intra-day deals. The stock recovered 8 per cent from its 52-week low of ₹1,976.80 touched on July 1, 2026. It hit a 52-week high of ₹3,414 on July 9, 2025. Currently, TCS quotes 2 per cent higher at ₹2,090.90 on the NSE.

 

TCS reported a muted Q1 with flat revenue in constant currency and operating margin decline due to annual wage hikes. The $9.5 billion total contract value (TCV), despite moderating sequentially, reflects continued large deal activity led by the $800 million SKF AI-led transformation contract, indicating that enterprise spending on AI, modernization and platform transformation remains intact.   ALSO READ | TCS stock can rally up to 20% to ₹2,500 levels: Tech analyst

 

AI annualized revenue increased to $2.6 billion, while strategic partnerships with Anthropic and Mistral further strengthen the company's AI capabilities. The management also indicated that AI-led productivity gains of 10–15 per cent are increasingly being passed on to clients, although incremental transformation opportunities are helping offset revenue deflation, ICICI Securities said in a note.

 

However, discretionary spending continues to remain uneven across sectors, with Consumer Business still under pressure amid geopolitical uncertainties, while management expects Manufacturing and Life Sciences to recover gradually Q2 onwards. On the margins front, management reiterated its intent to restore margins to 25%+ in this FY through operational efficiencies, though the pace of recovery will remain dependent on demand normalization and continued investments in AI capabilities. 

 

Overall, the quarter reflects stable execution with encouraging AI traction, although a broad-based demand recovery is yet to fully materialize for us to remain constructive on the stock, ICICI Securities said.

 

TCS delivered in-line revenue growth, supported by India, Technology & Services, and BFSI. While TCV fell 21 per cent quarter on quarter to $9.5 billion, the higher share of net-new deals, led by the $800 million SKF mega deal, improves FY27 visibility, analysts at Systematix Institutional Research said.

 

On year-on-year (YoY), client additions remained healthy across major revenue bands for the second consecutive quarter. BFSI is expected to sustain growth momentum, while other key verticals such as Manufacturing, Life Sciences and Tech Services are likely to improve in Q2. AI is also emerging as a meaningful growth driver, with annualised AI services revenue reaching $2.6 billion, or 8.5 per cent of revenue, the brokerage firm said.

 

Analysts believe that TCS is likely to minimize its revenue growth gap with peers in FY27E, supported by net-new large deals, and potential pick-up in developed markets.  ==============================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.