10 IT stocks add Rs 2,75,000 crore in m-cap in best week in 18 years; here's why

Investor wealth swelled by Rs 2,75,000 crore as the Nifty IT index posted its best weekly gains in 18 years, driven by a global reversal of the AI trade and strong quarterly results from domestic technology giants. The market capitalisation of 10 IT stocks rose to Rs 25.41 lakh crore on Friday from Rs 22.66 lakh crore a week ago, an increase of Rs 2.75 lakh crore, data compiled by Business Today from corporate database AceEquity showed.

Tata Consultancy Services Ltd (TCS) alone added Rs 1.1 lakh crore, while Infosys Ltd and HCL Technologies Ltd added another Rs 1 lakh crore to the figure.The reverse AI trade gathered pace following a higher-than-expected US inflation print, which raised doubts over AI-related commitments by technology giants amid rising bets on Fed rate hikes.

So far, IT spending has been shifting toward Al infrastructure, tokens, Al-enabled software, cybersecurity, data readiness and modernization, while traditional maintenance, support and other effort-based services have been facing increasing pricing pressure.

With interest rates rising globally and US Treasury bond yields still above 5 per cent, questions have emerged over mounting AI debt.

"IT emerged as the standout performer on robust earnings and upbeat management commentary, aided by rotation into domestic largecaps following a sell-off in tech-heavy global markets," said Vinod Nair, Head of Research, Geojit Investments.

Investors are now more open to non-AI stories, while India offers diversification, HSBC said on Friday. It said across sectors, valuation premiums have eased notably in IT services, although some of this de-rating reflects weaker growth, it said.

Q2 results, IT stocks
Nifty IT soared 11.72 per cent for the week, the biggest weekly gain sinec April 2008. Tech Mahindra Ltd climbed 18.22 per cent for the week to Rs 1,790. This IT firm delivered a broad-based beat in Q2, with revenue growing 2.4 per cent QoQ in CC terms, despite a 3.8 per cent QoQ decline in Manufacturing on the high base of the European auto ramp-up.

It was followed by TCS that gained 14.33 per cent to Rs 2,465. Analysts noted that TCS' deal wins in Q2 were healthy at $9.6 billion, excluding Porsche and Best Buy. Annualised AI revenue has now reached $3.1 billion, accounting for over 10 per cent of revenue and signalling increasing monetisation of AI-led opportunities.

HCL Technologies Ltd advanced 13.42 per cent to Rs 1,380. On HCL, analysts said while the FY27 guidance was raised, organic growth guidance stayed unchanged at the midpoint. They said large-deal ramp-up will support FY28 growth for HCL Tech.

Bullish technical setup
Large-cap IT stocks remained in a technically strong setup and are expected to maintain their positive momentum, said SBI Securities. It said Nifty IT has gained around 15.5 per cent from the low of 28,232 recorded on September 29.

"The RSI has rebounded sharply from the oversold territory and is currently hovering around 73, indicating strong bullish momentum. The ratio line in the Nifty IT/Nifty ratio chart has also broken out of a falling parallel channel, highlighting the sector’s improving relative strength and outperformance against the benchmark index. Additionally, Nifty IT is firmly placed in the leading quadrant of the RRG, indicating strong relative strength and momentum," it said.

On the daily chart, NSE IT is on the cusp of breaking its lower-low, lower-high structure. The 32,000–32,200 zone is the immediate resistance. A decisive and sustained move above this zone could pave the way for a continuation of the pullback in the near term, SBI Securities said.