IT stocks emerged as the primary gainers on Wednesday, August 19, with Coforge Ltd. gaining 2.47% and Persistent Systems rising 2.18% by midday, snapping a three-day losing streak. According to reports from Kotak Neo, the broader IT sector recovery saw HCL Technologies climb 1.36% to ₹1,315.70, Infosys add 1.04% to ₹1,126.60, Wipro advance 0.4% to ₹178.78, and Tech Mahindra rise 0.23%. The Nifty IT index recovered 0.76% to 30,441.80 around 9:20 am, outperforming a weak broader market where the Nifty 50 was down 0.15% at 24,118.40 and the Sensex fell 106 points. The sectoral index remains down 3.94% over the past three sessions amid weak global technology sentiment and continued pressure on technology stocks across Asian markets.
The stronger performance of Coforge and Persistent Systems came after CLSA maintained a High Conviction Outperform rating on both stocks, with the brokerage seeing select mid-tier IT companies as better placed to benefit from technology industry changes. As reported by TradingView News, CLSA turned cautious on several of India's biggest IT services companies, warning that artificial intelligence could exert deflationary pressure on their traditional businesses while macroeconomic uncertainty keeps near-term demand visibility low. The brokerage downgraded TCS, Infosys and Tech Mahindra to Hold from Outperform, citing the long gestation period for the benefits from AI and limited potential upside. It went a step further on Wipro and Mphasis, downgrading both to Underperform from Hold on structural concerns. In contrast, CLSA retained its High Conviction Outperform ratings on Persistent Systems and Coforge, while maintaining Outperform on LTM (LTIMindtree) and Hexaware Technologies. The sharp divergence reflects CLSA's view that mid-tier IT vendors are better placed to take advantage of major structural changes in the technology landscape.
Titagarh Rail Systems remained in focus after Maharashtra approved the 25-km Metro Line 13 corridor connecting Mira-Bhayandar with Vasai-Virar. As reported by The Financial Express, the project includes 16 stations and could create future procurement opportunities for metro coaches and rail systems, although no rolling stock order has been awarded so far. HG Infra Engineering gained 6.36% after receiving a letter of intent from REC Power Development for construction of two 220/132/33 kV substations in Uttar Pradesh.
Zaggle Prepaid Ocean surged 15.1% by midday after a Vijay Kedia-run company acquired a 1.48% stake through a bulk deal, with trading volumes crossing 17.6 million shares across NSE and BSE. According to The Financial Express, Milky Mist Dairy Food rose 10% and hit the upper circuit after making its market debut at a 17.86% premium to its IPO price, with the company raising ₹1,553 crore through the IPO for production expansion and debt clearance.
City gas distribution stocks gained momentum with Mahanagar Gas rising 3.83%, Indraprastha Gas advancing 3.09% and Adani Total Gas advancing 2.24% after the Centre approved an incentive scheme to accelerate billed domestic PNG connections. As reported by The Financial Express, RailTel Corporation gained 4.1% after receiving a one-year extension worth ₹166.80 crore from EPFO for Infrastructure-as-a-Service, securing four orders in August with Q1 FY27 revenue rising 20% to ₹893.2 crore.
Despite the selective buying in IT, infrastructure and city gas distribution stocks, Indian equities remained under pressure with the Nifty 50 hovering around 24,118.40 and the Sensex around 76,900 by midday. According to Kotak Neo, Wednesday's gains mark a recovery after three consecutive sessions of selling, with the Nifty IT index showing resilience after recent losses despite remaining down over the past five sessions. CLSA's preference for mid-tier IT over large-cap IT is echoed by VK Vijayakumar, Chief Investment Strategist at Geojit Investments, who said earlier this week that mid-cap IT was "outperforming large-cap IT significantly" and expected that trend to continue. The longer gestation period for AI-led growth, along with limited near-term upside in some IT stocks, continues to keep sentiment towards the sector cautious.
