Nifty IT index surges nearly 3% last week on Infosys-led rally, biggest jump in over a month

Domestic technology stocks staged a strong comeback last week after moving sideways for over a month, supported by better December-quarter growth at large-cap firms, healthier deal pipelines, and management commentary indicating that demand conditions have stabilised. The improved sentiment in the IT sector also helped the Nifty 50 remain higher during the week with mild gains.

The Nifty IT index closed Friday’s session with a 3.34% surge—the biggest single-day spike since May 2025—with a large contribution coming from Infosys. The stock ended the session with a bumper rally of 5.7% at ₹1,689 apiece.

The late rally also contributed to a 2.8% gain in the index in the holiday-shortened week, marking the largest weekly jump in over a month.

Eight out of the ten constituents of the index closed in the green, with Tech Mahindra leading the rally, surging 5.6%, followed by Oracle Financial Services and Infosys, each of which ended the week with gains of over 5%.

Other stocks, including LTIMindtree, Coforge, HCL Technologies, Wipro, and Mphasis, rallied between 1.7% and 4.5%.

Mr. Ajit Mishra, SVP, Research, Religare Broking, said, “Optimism from better-than-expected Q3 earnings by select large-cap IT companies was offset by tariff-related uncertainties, geopolitical tensions, and continued foreign fund outflows.”

AI-led deal wins lift IT sector despite seasonally weak quarter

The December quarter is typically a weak period due to furloughs. However, top IT majors managed to post better-than-expected topline growth and secured new deals, as clients of India’s $283 billion IT sector showed greater willingness to invest in AI-driven projects.

Infosys reported December-quarter revenue of $5.1 billion, up 0.45% sequentially. Demand from financial services, energy, and healthcare clients improved, aided by AI-led modernisation work. Net profit, however, fell 11% quarter-on-quarter to $747 million due to higher wage costs.

Tata Consultancy Services posted revenue of $7.51 billion, growing 0.6% sequentially, with net profit rising 2.7% to $1.5 billion. Margins remained flat at 25.2% despite absorbing higher labour costs.

HCL Tech delivered the strongest growth, with revenue of $3.79 billion, up 4.1% sequentially, and profit climbing 10.5% to $537 million.

Tech Mahindra reported bigger-than-expected third-quarter revenue on Friday, aided by growth in its communications and manufacturing segments. Revenue at India's fifth-largest IT firm rose 8.3% to 143.93 billion rupees ($1.58 billion) in the three months ended December 31.

Wipro reported that consolidated sales rose 5.54% to $2.59 billion, while net profit fell 7% to ₹31.19 billion. The Bengaluru based company reported that deal bookings fell to a six-quarter low in the December period.

It reported total deal bookings of $3.34 billion for the third quarter, compared with $4.69 billion in the previous quarter and $3.5 billion in the same period last year.

Healthy outlook

Management commentary across top IT firms remained largely constructive, with companies indicating that AI-led demand is expected to support growth momentum into the final quarter of FY25.

Infosys raised its full-year revenue growth guidance to 3–3.5%, citing improved demand from financial services, energy, and healthcare clients, driven by AI-led modernisation deals.

HCL Tech projected 4–4.5% revenue growth for FY25 while maintaining that its services segment revenue is expected to grow 4.75–5.25% year-on-year in constant currency terms. The company also guided for an EBIT margin of 17–18%.

Wipro struck a more cautious tone, forecasting flat to 2% sequential revenue growth in the March quarter, including contributions from acquisitions, after deal bookings fell to a six-quarter low in the December quarter.

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