Infosys, TCS, HCL Tech Share Price: Why IT Stocks Are Gaining Today?

The domestic equity market started Tuesday’s session (March 25) on a positive note, led majorly by IT stocks. In early session, IT services giants Infosys jumped 2.6 per cent, Tata Consultancy Services (TCS) rose over 2 per cent, and HCL Technologies gained up to 3.4 per cent.

Persistent Systems and Coforge gained in the range of 2.5 per cent to 3.5 per cent. Other IT stocks such as Wipro, Tech Mahindra, L&T Technology Services, and Mphasis, also traded in the green. However, LTIMindtree was the only loser from the Nifty IT index, having lost nearly one per cent.

Accordingly, the IT index, which tracks 10 major IT stocks in India, rose as much as 2.3 per cent, extending gains for the fourth consecutive day.

Why IT Stocks Are Gaining Today?

According to Sumit Pokharna, VP-Fundamental Research, Kotak Securities, Indian IT stocks are mirroring the strong revival in US tech stocks after US President Donald Trump signalled flexibility on planned tariffs, which eased investor concerns about a potential trade war.

The tech-heavy Nasdaq Composite index on Monday rose 2.27 per cent, led by gains in Meta Platforms, Amazon, Nvidia and Apple.

“Needless to say, all major Indian IT companies that earn a significant portion of their revenue in US dollars are reacting positively to these expectations,” he added.

Nifty IT Index Still Off 20 Per Cent From Record High

Around noon today, the Nifty IT index traded 37,700 level, up around 1.35 per cent from the previous close. In the previous four sessions, the index has gained over 4 per cent, however, it still trades nearly 20 per cent down from its its record high, hit in December 2024.

Accenture’s Q2FY25 earnings report released last week on March 20, however, raised concerns about India’s IT sector, triggering a sharp correction in India’s major IT stocks the next day. However, the correction was absorbed quickly and most IT stocks ended in green on March 21.

Accenture’s earnings report indicated India's IT services sector too is expected to see a slowdown in discretionary spending over the next few quarters. The IT company’s management had highlighted that rising global economic and geopolitical uncertainty is affecting public services, especially with government spending cuts. While there has been some improvement in spending in areas like banking and capital markets in the US, the IT giant mentioned that the overall situation remains the same, with clients mainly focusing on big transformation projects.

Shibani Kurian, senior EVP & head of equity research at Kotak Mutual Fund, explained, that the potential slowdown in US GDP growth and its impact on discretionary tech spending, as well as the effect of tariffs on cross-border trade and US inflation are weighing heavy on the tech sector.

However, despite the near-term volatility, Kurian believes that the long-term growth prospects for IT services remain strong, especially as more companies worldwide enter the AI adoption phase. Kurian believes this presents a multi-year growth opportunity for Indian IT services.

VK Vijayakumar, Chief Investment Strategist, at Geojit Investments, too, concurs the same, adding, “The risk-reward in IT stocks is now favourable for buyers.”

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