TCS, Infosys, Wipro shares jump; Nifty IT rises 2%; what analysts say

Shares of Indian IT companies staged a sharp recovery in Friday's trade, with the Nifty IT sub-index rising more than 2 per cent at the last check.

Tata Consultancy Services Ltd (TCS), Infosys Ltd and Wipro Ltd were among the top gainers, with their shares rising up to 4 per cent. All constituents of Nifty IT traded in positive territory, including HCL Technologies Ltd, Tech Mahindra Ltd, LTM Ltd, Mphasis Ltd, Persistent Systems Ltd, Oracle Financial Services Software Ltd (OFSS) and Coforge Ltd.

What analysts say

Ravi Singh, Chief Research Officer at Master Capital Services, said Indian IT stocks rebounded despite concerns over the US suspension of PERM applications and TCS reporting mixed quarterly results.

He attributed the recovery partly to a sell-off in global AI stocks following reports that OpenAI's annualised revenue was around $50 billion, below the previously indicated $70 billion.

"This has prompted investors to reassess AI-related valuations and may have eased some concerns about the immediate pace of disruption to traditional IT services, supporting buying in Indian IT stocks," Singh added.

He said TCS' 15 per cent year-on-year (YoY) growth in net profit and 11.2 per cent increase in revenue also supported sentiment, despite mixed sequential growth. He added that comments from Nasscom and TCS' limited dependence on the PERM route had helped ease concerns over the US policy development.

However, Singh cautioned that the sustainability of the recovery would depend on earnings visibility, deal conversion and clarity on AI-led demand.

Meanwhile, Kranthi Bathini, Equity Strategist at WealthMills Securities, advised investors with a near-term investment horizon to hold IT stocks. For long-term investors, he viewed the sector as a contrarian bet and recommended a 'buy-on-dips' approach.