Indian IT stocks have maintained their strong momentum, with the Nifty IT index surging 3.92% on Friday, October 16, extending gains for the fourth consecutive session. According to LiveMint, in just four sessions, the index has jumped nearly 13% from previous levels. The rally comes as investors respond to better-than-expected Q2 results and a selloff in AI stocks globally as investors shift their focus from hype to financial performance and structural outlook. IT stocks are rising after a prolonged period of stress due to macroeconomic challenges, cautious discretionary spending by clients, and AI-led disruptions. The sector remains at a crucial juncture as experts believe the next leg of growth will depend on translating deal wins into revenue and scaling AI-led services sufficiently to offset productivity-driven deflation in traditional engagements.
Tata Consultancy Services reported consolidated revenue of ₹73,188 crore in Q2FY27, up 11.2% year-on-year, while net profit increased 15% to ₹13,884 crore. As reported by LiveMint, the company's annualised AI revenue run rate exceeded $3.1 billion, accounting for more than 10% of its total revenue. TCS secured quarterly deal bookings of $9.6 billion and expanded AI partnerships with global businesses including Porsche AG and Best Buy. The company's total contract value (TCV) reached $9.6 billion in the quarter ended September 2026, with management reporting AI revenues of $3.1 billion amid continued industry demand. Sumit Pokharna from Kotak Neo noted that AI revenue grew faster in BFSI relative to other verticals, with enterprises investing in AI native business solutions, core modernization with AI, autonomous GBS in horizontal functions, and modernizing legacy data estate.
HCL Technologies reported revenue from operations of ₹35,620 crore, up 11.52% YoY, marginally ahead of TCS's 11.2% growth. According to LiveMint, net profit rose 21.2% to ₹5,132 crore with the company announcing an interim dividend of ₹12 per equity share. A major highlight was a $1.14 billion AI deal with Mercedes-Benz, contributing to quarterly deal bookings of nearly $3.3 billion. HCL Tech's advanced AI revenue increased 78% in constant-currency terms to $219 million, and the company raised its FY27 revenue growth guidance to 2.5-4% in constant currency terms, compared with its earlier range of 1-4%. Kunal Bajaj from Choice Institutional Equities highlighted that HCL Tech's record $3.3 billion bookings and 131 bps QoQ margin expansion reflected stronger operating momentum, while Wipro's IT services revenue declined marginally by 0.1% QoQ.
Infosys CEO Salil Parekh announced that AI services accounted for more than 8% of the company's revenue in the second quarter and were growing at a double-digit rate sequentially. As reported by TradingView News, he estimated that AI revenues could drive almost half of the company's work over the next two to three years. This represents a significant acceleration in AI's contribution to Infosys's overall revenue mix, positioning the company well for the ongoing AI transformation wave. The company's strong AI performance contributed to the broader sector rally and investor optimism about AI-driven growth potential. According to Pokharna from Kotak Neo, AI capabilities continue to improve across the spectrum of skills and tasks, with meaningful progress in software engineering tasks over the past 6-9 months when measured on performance of AI models on benchmarks.
Tech Mahindra reported consolidated revenue of ₹16,180 crore in Q2FY27, up 15.6% YoY, with net profit surging 32.7% to ₹1,586 crore. As reported by LiveMint, the company secured deal wins exceeding $1 billion in each of the last four quarters and delivered 7.2% YoY constant-currency revenue growth. Tech Mahindra expanded its AI initiatives including launching Zero Gravity Telco Architecture with SpaceXAI and Indus Terra, a 30-billion-parameter educational large language model. The company declared an interim dividend of ₹15 per equity share and approved a 1:1 bonus issue. Tech Mahindra shares gained as much as 5% to their day's high of ₹1,736 on Friday after reporting strong Q2 results. Bajaj from Choice Institutional Equities believes companies with stronger pipelines, diversified growth drivers and consistent margin execution are better positioned to outperform.
Wipro reported gross revenue of ₹24,752.7 crore in Q2FY27, up 9.1% YoY, but consolidated net profit declined 1.4% to ₹3,200.6 crore, making it the only company among the four to report a year-on-year profit decline. According to LiveMint, total deal bookings fell to $2.6 billion from $4.7 billion a year earlier, with large deal bookings dropping 58.6% sequentially to $0.7 billion. Despite these pressures, Wipro announced it would acquire a 20% shareholding in FLARRE.AI Inc through its step-down subsidiary and expects IT services revenue of $2,571-2,625 million for Q3FY27. Bajaj noted that Wipro's IT services revenue declined marginally by 0.1% QoQ, highlighting the uneven pace of recovery across the sector.
On October 16, the SENSEX advanced by 413.66 points or 0.56% to close at 74,729.27, while the NIFTY50 ended higher by 148.80 points or 0.65% at 23,146.15. During Friday's session, the SENSEX gained as much as 0.62% to hit an intraday high of 74,778.78, while the NIFTY50 surged as much as 0.7% to touch the session's peak of 23,149.85. According to exchange data, foreign institutional investors (FIIs) purchased shares worth ₹1,165.92 crore, while domestic institutional investors (DIIs) sold equities worth ₹3,661.28 crore on a net basis. The NIFTY50 was supported by buying in Tech Mahindra shares, which closed 8.48% higher after reporting strong Q2 results. Other top gainers included TCS (4.89%), Infosys (4.61%), Bharti Airtel (2.75%), and HCL Technologies (2.37%).
