$100 billion Indian IT selloff exceeds Venezuela, Sri Lanka GDPs; what's next?
A third of this m-cap erosion is seen by TCS at Rs 3,61,465 crore or $40 billion. This does not include Tuesday's losses. Infosys contributed another $21 billion, Wipro Ltd $10 billion and HCL Technologies Ltd $6.50 billion.
- Feb 24, 2026,
- Updated Feb 24, 2026 2:27 PM IST
Amid concerns over discretionary spending and disruption from artificial intelligence (AI), 75 Indian IT firms together have lost over $100 billion in market capitalisation (m-cap) over the past one year. This is higher than the IMF’s 2026 gross domestic product (GDP) estimate for Venezuela and the latest available annual GDP figure for Sri Lanka for 2024.
These 75 listed firms commanded an m-cap of Rs 30,32,473 crore on Monday, compared with Rs 38,93,309 crore on February 24, 2025, implying an erosion of Rs 8,60,836 crore. Adding the Rs 84,000 crore decline in m-cap by five IT stocks in today’s trade takes the total erosion for the Indian IT sector to roughly Rs 9,44,836 crore or $104 billion ($100 billion equals Rs 9,10,000 crore at rupee-dollar exchange rate of 91). Venezuela's 2026 GDP at current prices is pegged at $79.92 billion by IMF. Sri Lanka's GDP for 2024 stood at $98.96 billion
A third of this m-cap erosion is seen by TCS at Rs 3,61,465 crore or $40 billion. This does not include Tuesday's losses. Similarly, Infosys Ltd contributed another $21 billion, Wipro Ltd $10 billion and HCL Technologies Ltd $6.50 billion.
Citrini Research in a note earlier today outlined a scenario in which contract cancellations at Tata Consultancy Services Ltd, Infosys Ltd and Wipro would accelerate through 2027. Jefferies, on the other hand, slashed its target prices on Indian IT names by up to 33 per cent, saying the artificial intelligence may structurally change IT business mix towards consulting and implementation while shrinking managed services. This, it said, would not only increase cyclicality but also require a change in talent and operating model, thus adding risks.
Kotak Institutional Equities said IT stocks have taken a beating due to heightened fears of revenue deflation from GenAI. Fears are triggered by recent model releases from frontier AI labs and the growing use of agent-based workflows.
"Model improvements so far look incremental and broadly in line with our expectations, but the sharp stock move reflects deeper concerns about the long-term relevance and longevity of IT services. In our view, markets are discounting disruption far more than current evidence supports," it said.
Jefferies said maintaining the long-term revenue growth trajectory in line with previous decade is the best case outcome for IT firms. The worst case outcome could be 3 per cent lower revenue CAGR over FY26-31 (15 per cent cumulative deflation) followed by no growth beyond FY31, it said.
"In the best case, PE multiples could range between 14-22 times for large IT firms with Infosys, HCLT and TCS offering c.15 per cent rerating potential, and 23-42 times for mid-sized IT firms with Hexaware/IKS offering 35-45 per cent rerating potential," Jefferies said.
At a time when investors are questioning the relevance of the business models of India IT services firms due to AI, Nomura said it sees an opportunity for India in AI applications and the data centre buildout.
"We expect India’s construction GDP growth to accelerate in coming quarters, reflecting AI data centre investments and demand for AI ecosystem in server manufacturing, power and electrical infrastructure, among others," it said.
Amid concerns over discretionary spending and disruption from artificial intelligence (AI), 75 Indian IT firms together have lost over $100 billion in market capitalisation (m-cap) over the past one year. This is higher than the IMF’s 2026 gross domestic product (GDP) estimate for Venezuela and the latest available annual GDP figure for Sri Lanka for 2024.
These 75 listed firms commanded an m-cap of Rs 30,32,473 crore on Monday, compared with Rs 38,93,309 crore on February 24, 2025, implying an erosion of Rs 8,60,836 crore. Adding the Rs 84,000 crore decline in m-cap by five IT stocks in today’s trade takes the total erosion for the Indian IT sector to roughly Rs 9,44,836 crore or $104 billion ($100 billion equals Rs 9,10,000 crore at rupee-dollar exchange rate of 91). Venezuela's 2026 GDP at current prices is pegged at $79.92 billion by IMF. Sri Lanka's GDP for 2024 stood at $98.96 billion
A third of this m-cap erosion is seen by TCS at Rs 3,61,465 crore or $40 billion. This does not include Tuesday's losses. Similarly, Infosys Ltd contributed another $21 billion, Wipro Ltd $10 billion and HCL Technologies Ltd $6.50 billion.
Citrini Research in a note earlier today outlined a scenario in which contract cancellations at Tata Consultancy Services Ltd, Infosys Ltd and Wipro would accelerate through 2027. Jefferies, on the other hand, slashed its target prices on Indian IT names by up to 33 per cent, saying the artificial intelligence may structurally change IT business mix towards consulting and implementation while shrinking managed services. This, it said, would not only increase cyclicality but also require a change in talent and operating model, thus adding risks.
Kotak Institutional Equities said IT stocks have taken a beating due to heightened fears of revenue deflation from GenAI. Fears are triggered by recent model releases from frontier AI labs and the growing use of agent-based workflows.
"Model improvements so far look incremental and broadly in line with our expectations, but the sharp stock move reflects deeper concerns about the long-term relevance and longevity of IT services. In our view, markets are discounting disruption far more than current evidence supports," it said.
Jefferies said maintaining the long-term revenue growth trajectory in line with previous decade is the best case outcome for IT firms. The worst case outcome could be 3 per cent lower revenue CAGR over FY26-31 (15 per cent cumulative deflation) followed by no growth beyond FY31, it said.
"In the best case, PE multiples could range between 14-22 times for large IT firms with Infosys, HCLT and TCS offering c.15 per cent rerating potential, and 23-42 times for mid-sized IT firms with Hexaware/IKS offering 35-45 per cent rerating potential," Jefferies said.
At a time when investors are questioning the relevance of the business models of India IT services firms due to AI, Nomura said it sees an opportunity for India in AI applications and the data centre buildout.
"We expect India’s construction GDP growth to accelerate in coming quarters, reflecting AI data centre investments and demand for AI ecosystem in server manufacturing, power and electrical infrastructure, among others," it said.