Indian IT stocks extended their rally for the third consecutive day, with Wipro and Coforge leading gains at 4% and 2.6% respectively during intraday trading, but the sector faces renewed pressure from global market movements. According to latest reports, American Depositary Receipts of Infosys Ltd. and Wipro Ltd. also slid as global investors rotated back into AI-linked memory and chipmakers on Thursday. Sandisk surged as much as 24.11% to a high of $1,268.40, highlighting the volatility in technology stocks as investors shift focus from software services to hardware and memory solutions.
Across TCS, Infosys, HCL Tech and Wipro, the common theme emerging from Q1 results is that discretionary technology spending remains subdued, deal conversion cycles are elongated and AI-led productivity is beginning to reshape traditional IT services economics, as reported by Mint. While companies continue to announce healthy deal wins, revenue growth has not kept pace, suggesting that execution remains the key challenge rather than order inflows. Market analysts note that companies are navigating a softer demand environment while maintaining focus on AI transformation initiatives. The sector faces additional headwinds from rising wage costs and the impact of AI on traditional outsourcing revenues, with revenue growth expected to remain in the low-to-mid single digits over FY26–FY28E.
Wipro emerged as the top performer, trading 4% higher at ₹190.96 on the NSE, while Coforge gained 2.6% to ₹1,759.8 during Thursday's session. According to latest market data, stock-specific earnings continue to drive investor sentiment as market participants weigh individual results rather than making broad sectoral bets. The strong performance of these two stocks contrasts with the mixed results seen across the broader IT sector, highlighting the importance of company-specific fundamentals in current market conditions.
KPIT Technologies declined 7.3% to ₹590.9 while Hexaware Technologies fell nearly 6.5% to ₹578.3 after their quarterly earnings disappointed investors. As per latest market reports, the decline in these two stocks reflects the mixed performance across IT companies during the ongoing earnings season. Investors are making selective choices based on individual company fundamentals and earnings quality, with stock-specific earnings continuing to drive investor sentiment rather than broad sectoral movements.
Seema Srivastava from SMC Global Securities believes that among Tier-1 IT companies, TCS and HCL Technologies continue to stand out as the strongest investment opportunities after Q1 FY27, while Infosys remains a balanced long-term play and Wipro appears the weakest near-term candidate. According to Mint, investors seeking stability and strong cash flows may prefer TCS, while those looking for higher AI-led growth potential can consider HCL Technologies. Harshal Dasani from INVasset PMS noted that he does not find any large-cap IT names compelling enough to warrant fresh exposure at current valuations, citing that TCS continues to command a premium despite moderating growth, Infosys has lowered its growth guidance, HCLTech is navigating softer demand, and Wipro still faces execution challenges. However, Jefferies has added Infosys and increased its weight in Coforge in its model portfolio, taking its overall IT allocation to neutral, indicating potential for sector recovery despite current global headwinds.
