Nifty IT Index Hits 4-Month High; TCS, Infosys, HCL Tech, Tech Mahindra Rally 9–15%

The Nifty IT index continued its upward trend for the second consecutive day, rising 2% on the NSE on Thursday. It reached 38,471.60, its highest level since July 10, 2025. This surge comes as expectations grow for improved earnings in the IT sector.

Over the past month, the IT index has climbed 9%, compared with just a 0.16% gain in the Nifty 50. However, in the calendar year 2025 (CY25) so far, the IT index has underperformed, dropping 11%, while the Nifty 50 gained 10%.

IT Stocks Leading the Gains

Major IT companies have seen a notable increase in the past month:

• TCS, Infosys, HCL Technologies, Tech Mahindra, LTIMindtree, Persistent Systems, L&T Technology Services up 9% to 15%.

In intra-day trade on Thursday, TCS, Coforge, Mphasis, Persistent Systems, LTIMindtree, HCL Technologies, and Tech Mahindra were up 2–3% each.

Why IT Stocks Are Outperforming

• Rupee Depreciation Advantage: IT companies earn most of their revenue in US dollars, so a weaker Indian rupee boosts profits when converted into rupees.
• Better Margins: In Q2FY26 (July–September), IT companies’ EBIT margins surprised positively, partly due to a 3% INR depreciation. Most companies beat margin estimates by 30–90 basis points.
• Operational Efficiency: Firms have protected margins during weak demand phases through cost controls, wage deferrals, and efficiency measures.

Growth Outlook and AI Impact

• Vertical-wise, financial services and hi-tech sectors show promising performance, while manufacturing and retail still face challenges from tariff uncertainties.
• Adoption of AI-led solutions by enterprises is gradually increasing productivity. Although growth was soft in CY25 due to data quality issues, demand for AI-driven transformation is expected to rise steadily in the coming year.

Read More: IndusInd Bank Appoints Balaji Narayanamurthy as Chief Data Officer!

Conclusion

The IT sector is showing signs of recovery after underperforming in CY25. With a weak rupee, improving earnings, and growing adoption of AI, IT stocks like TCS, Infosys, and HCL Tech are likely to continue their upward momentum, supporting the broader sector recovery in CY26.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

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