Shares of India’s top IT companies surged sharply on Tuesday, with the Nifty IT index climbing 6% intra-day to 40,301.4 on the National Stock Exchange (NSE). The rally was led by Tech Mahindra, which hit a record high of ₹1,854, gaining 8% in intra-day trade. Other major IT players such as HCL Technologies, Mphasis, Persistent Systems, Wipro, Infosys, and TCS also saw substantial gains, with increases ranging from 6% to 8%.
At 11:14 AM, the Nifty IT index was up 2.2%, compared with a 2.75% rise in the Nifty 50, highlighting strong investor interest in IT stocks.
Market Performance Snapshot
- Nifty IT Index: Up 6% intra-day at 40,301.4
- Tech Mahindra: ₹1,854, +8% intra-day, record high
- HCL Technologies: ₹1,780.10, 52-week high, +6% intra-day
- Other IT Stocks: Mphasis, Persistent Systems, Wipro, Infosys, TCS – gains between 6% and 8%
- Nifty 50: 2.75% rise during the same period
Over the past six months, the IT index has significantly outperformed the benchmark index, posting a 12% gain compared with a 4.3% rise in Nifty 50.
What’s Driving the IT Rally?
The surge comes on the back of a key India–US trade agreement. The deal has reduced reciprocal tariffs on Indian goods to 18%, boosting sentiment around India’s export ecosystem, including the IT services sector.
While IT services and software exports are not directly affected by tariffs, the improved trade relations with the US—contributing over 60% of revenue for Indian IT companies—have strengthened investor confidence. This deal reflects a broader strategic alignment between India and the US and eases geopolitical uncertainties, which could influence corporate spending on technology services.
Key Factors Supporting IT Sector Momentum
Several elements have contributed to the bullish sentiment in IT stocks:
- Improved geopolitical sentiment: Positive India-US trade relations encourage US clients to reconsider technology budgets in favor of Indian IT companies.
- Growth in AI and R&D: Long-term prospects in artificial intelligence (AI), engineering research and development, and platform-led work continue to strengthen.
- Budget 2026 Provisions: Specific announcements support the IT ecosystem:
- Buyback proceeds now treated as capital gains, supporting potential buyback activity.
- Revision of safe harbor margins and broader thresholds simplifies compliance processes.
- Tax holiday for foreign companies using Indian data centers for global cloud services makes the Indian data center ecosystem more attractive.
Indian Data Center Growth Potential
The IT sector is also set to benefit from the expanding data center ecosystem in India:
- Rising AI-inferencing workloads and data localization requirements under the DPDP Act.
- Incentives at the state level to attract data center investment.
- Increasing cloud adoption among Indian enterprises.
The Budget 2026 provides a tax holiday until FY2047 for global cloud service providers using Indian data centers to deliver services worldwide, provided the services are routed through an Indian reseller. Data centers must be owned and operated by Indian companies under MEITY-approved schemes. These steps are expected to support long-term growth in the Indian IT and data center markets.
Company Highlights
- Tech Mahindra: Intra-day record high at ₹1,854, surged 8%.
- HCL Technologies: 52-week high at ₹1,780.10, up 6%.
- Other IT Leaders: Mphasis, Persistent Systems, Wipro, Infosys, TCS – up 6–8%.
The sector-wide rally reflects strong investor interest and confidence in India’s IT exports and digital infrastructure.
Summary
Tuesday’s market action reinforced the resilience and growth potential of India’s IT sector. The Nifty IT index’s 6% intra-day surge and record-breaking stock prices for Tech Mahindra and HCL Technologies highlight the market’s optimism. Positive trade developments, coupled with favorable Budget 2026 measures, have boosted investor sentiment and underscored India’s strategic positioning in the global technology ecosystem.
Source: Business Standard
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