Indian IT stocks down by 2% today: What's the reason?
01:33 pm
What’s the story
Shares of major Indian IT companies fell today, following Tata Consultancy Services’ (TCS) disappointing revenue report and cautious outlook.
The broader Nifty IT index fell over 1%, making it the worst-performing sectoral index of the day.
Firms such as Wipro, Infosys, HCL Technologies, Tech Mahindra, and LTIMindtree saw their shares decline by 1-2%.
Market reaction
How other IT stocks reacted
The impact of TCS’s muted June quarter results was felt across the tech sector.
Shares of TCS fell 1%, trading at ₹3,233.70 on the NSE.
Infosys shares dropped 1.8% to ₹1,566.50 while Wipro shares fell 1.2% to ₹255.15.
HCL Technologies saw a decline of 1.5% in its share price (₹1,613), LTIMindtree slipped by 2% (₹5,101), and Tech Mahindra was down by 1.5%.
Financial performance
Nuvama cuts TCS target price
Despite a strong bottom line and deal wins in Q1 FY26, TCS’s revenue quality and commentary has disappointed investors.
The firm reported a 3.1% year-on-year decline in constant currency revenue, partly due to a “sharp ramp-down in BSNL contracts.”
Nuvama maintained its ‘buy’ call but cut its target price from ₹4,050 to ₹3,950 for the stock.
Strategic response
TCS acknowledges demand contraction
TCS CEO K Krithivasan acknowledged “the continued global macro-economic and geo-political uncertainties caused a demand contraction.”
However, he also highlighted “robust deal closures during this quarter.”
He said the company is helping clients “through cost optimization, vendor consolidation and AI-led business transformation.”
Despite a $9.4 billion total contract value (TCV) for the quarter—up 13.3% YoY—the investors focused on soft sequential revenue and uncertain near-term demand.
How did brokerages react?
Brokerages have responded to TCS’s results by lowering their expectations.
Antique maintained its ‘buy’ rating on TCS but cut its target price by 3% to ₹3,725 due to “near-term pressures.” It also reduced FY26 and FY27 EPS estimates by 2-3%.
Motilal Oswal kept its ‘buy’ stance with a price target of ₹3,850 but flagged that “most of the Q1 revenue decline was led by BSNL, but international business also slipped 0.5% amid macro uncertainties.”