Last Updated:
The Nifty IT index surged 3% to hit 35,057.80 on the National Stock Exchange (NSE) during Wednesday’s intra-day trade
IT Stocks Surge
Nifty IT Index Rises: The Nifty IT index surged 3% to hit 35,057.80 on the National Stock Exchange (NSE) during Wednesday’s intra-day trade, driven by strong buying in frontline IT stocks. As of 9:25 AM, the Nifty IT index was the top-performing sectoral index, up 3.3%, compared to a 0.76% rise in the benchmark Nifty 50.
HCLTech led the surge, rising nearly 7% in early trade after announcing its fourth-quarter earnings on Tuesday. Other frontline IT names also posted strong gains, with Tech Mahindra and Infosys climbing over 3% and Tata Consultancy Services (TCS) adding close to 2%. The strength in IT stocks gave an early lift to benchmark indices Sensex and Nifty.
This rebound in tech shares comes despite conservative revenue forecasts from some of the sector’s largest players. Both TCS and Infosys have issued subdued growth guidance for the current fiscal year, citing macroeconomic uncertainties and restrained demand in key Western markets.
IT Stocks in Action
Shares of major IT companies rallied up to 7% on the NSE in Wednesday’s trade. HCL Technologies led the gains with a 7% surge to Rs 1,582.30. Other notable gainers included Coforge, Tech Mahindra, and Mphasis, each rising around 4%. LTIMindtree, Persistent Systems, Infosys, Wipro, and Tata Consultancy Services (TCS) also gained between 2% and 3%.
Despite the current rebound, the Nifty IT index has underperformed so far in calendar year 2025, declining 19% against a 2.4% gain in the Nifty 50. Stocks like TCS, Infosys, HCL Technologies, Tech Mahindra, Wipro, and LTIMindtree have dropped between 16% and 22% due to persistent growth concerns.
Analysts attribute the underperformance to fears of a US recession, uncertainty around US tariffs, and their potential impact on the supply chain. These factors could affect client decision-making, particularly with regard to discretionary technology spending in 2025.
What’s Fueling the Rally Today?
Wednesday’s surge in IT stocks follows a strong performance in the US markets, with the Nasdaq Composite rallying 429.52 points (2.71%) to close at 16,300.42 on Tuesday. Closer to home, HCL Technologies’ March quarter results, while soft, exceeded expectations and contributed to bullish sentiment in the sector.
HCL Technologies has projected revenue growth of 2% to 5% in constant currency terms for FY26, which, although lower than past years’ guidance, is ahead of Infosys’ 0% to 3% growth forecast. The company also reported record net new bookings worth $3 billion in Q4, with FY25’s total contract value (TCV) reaching $9.4 billion—driven largely by its engineering and R&D services.
ICICI Securities noted that the company hasn’t faced major deal cancellations, apart from one large project being shelved. The firm also highlighted potential fresher hiring amid a strong deal pipeline. HCLTech’s guidance for FY26 includes 2–5% revenue growth (1–4% organically) and EBIT margins between 18–19%, with management expressing cautious optimism despite macro challenges.
Historical Context: 2009 vs 2020
According to Kotak Institutional Equities, the IT services sector was more severely impacted during the 2009 financial crisis than in 2020. In 2009, financial services—a key vertical for Indian IT—saw massive cutbacks, with companies slashing tech spending after years of heavy investment. Conversely, in 2020, IT became a critical enabler as businesses pivoted online during lockdowns. This led to a surge in discretionary spending, cloud migration, and digital transformation initiatives.
While IT services saw muted growth in 2020, the industry rebounded sharply in 2021 and 2022, posting its highest-ever growth rates.
Valuation Bottoms in Past Crises
Kotak analysts suggest two approaches to estimating where IT stocks might bottom—historical valuation multiples and first-principle analysis. In 2009, Infosys bottomed at 11x one-year forward earnings, while during the Covid-19 downturn, TCS hit a bottom at 18x. However, with the sector’s competitive dynamics having evolved, analysts believe valuations could stabilize at different levels this time.