Indian IT Stocks Slide as Infosys, TCS and Peers Report Mixed Results

Shares of India’s leading information technology companies came under significant pressure following a series of mixed quarterly results and cautious future guidance, raising concerns about growth momentum in the sector. Stocks of major players including Infosys, TCS, HCLTech, and Tech Mahindra declined notably, dragging the Nifty IT index down by over 5% during intraday trading.

The sell-off reflects growing investor concerns over slowing revenue growth, weaker deal conversions, and uncertain global demand conditions. While most companies reported stable or improved profitability, the overall outlook for the coming quarters appears less optimistic, prompting caution among market participants.

TCS, the country’s largest IT services provider, reported a 12% year-on-year increase in net profit for the March quarter, reaching Rs 13,718 crore. Revenue also grew by 9.6% to Rs 70,698 crore. On a sequential basis, both profit and revenue showed healthy growth. However, despite these strong quarterly numbers, the company recorded its first annual revenue decline since listing, with a 2.4% drop in constant currency terms for FY26. This unexpected decline weighed heavily on investor sentiment, leading to a drop in its share price.

Infosys, the second-largest IT services firm in India, delivered solid profit growth in the fourth quarter. Net profit rose 20.8% year-on-year to Rs 8,051 crore, while revenue increased 13.4% to Rs 46,402 crore. However, the revenue figure fell short of market expectations, overshadowing the otherwise strong earnings performance. Additionally, the company revised its FY27 revenue growth guidance to a range of 1.5% to 3.5% in constant currency terms, indicating caution due to ongoing global uncertainties. This subdued outlook contributed to a sharp decline in its stock.

Wipro also reported a mixed performance. While its fourth-quarter revenue rose on both year-on-year and sequential bases, its net profit declined slightly compared to the same period last year. For the upcoming quarter, the company guided for flat to slightly negative revenue growth, signaling continued challenges in demand recovery. This cautious outlook led to a decline in its share price as well.

Tech Mahindra posted a relatively strong performance, with a 16% increase in net profit driven by operational improvements and margin expansion. Revenue also grew steadily, supported by strong deal wins and growth across key sectors such as communications and financial services. Despite these positives, the stock still declined, reflecting broader sectoral weakness and investor concerns about future growth sustainability.

HCLTech reported moderate growth in both revenue and profit for the March quarter. However, the company experienced a significant drop in deal bookings and subsequently lowered its revenue growth guidance for FY27. This downward revision raised concerns about pipeline strength and future revenue visibility, contributing to a decline in its stock price.

The broader decline in IT stocks can be attributed to several underlying factors. One of the key issues is the slowdown in sequential revenue growth across the sector, driven by delays in project execution and slower ramp-up of existing deals. Companies are also facing challenges in converting deal pipelines into actual revenue, which has impacted near-term performance.

Another major concern is the moderation in growth rates. After a period of strong expansion in previous years, the sector is now witnessing mid-single-digit growth, which has led to questions about valuation sustainability. Investors are increasingly cautious about whether current stock prices adequately reflect the changing growth dynamics.

The rapid advancement of artificial intelligence technologies is also emerging as a potential disruptor. There are growing concerns that AI-driven automation could lead to deflationary pressures in certain IT services segments, impacting long-term revenue growth. As a result, investors are closely evaluating how companies are adapting their business models to leverage AI while mitigating its risks.

Additionally, global macroeconomic uncertainties, including geopolitical tensions, have further dampened sentiment. These factors are influencing client spending decisions, leading to delays in new projects and cautious budget allocations.