NIFTY IT trims intraday gains; TCS bucks trend as sector logs sharp monthly recovery

By midday on Friday, the NIFTY IT index was inching lower, sitting at 32,027 after a 54-point or 0.17 percent decline. Despite a robust one-month recovery of over 13 percent, seven out of ten IT constituents fell. The IT gauge danced between 31,144 and 33,138 intraday, reflecting a volatile sentiment heading into the quarterly results season.

TCS emerged as the bright spot with a 1.16 percent gain, bringing its share price to ₹2,536. Infosys added 0.21 percent to ₹1,155, while HCL Tech hovered nearly flat. On the other hand, OFSS dropped 2.40 percent and LTM slipped 2.32 percent, with Tech Mahindra trailing 1.38 percent. Only three stocks managed to advance, while seven declined, marking a stark contrast to the sector's strong three-month return of 12.24 percent and impressive monthly gain of 13.03 percent.

However, the year-to-date loss of 16.10 percent and one-year decline of 11.23 percent indicate that the IT sector is still far from its 52-week high of 40,301. HDFC Securities, in its Q2FY27 results preview, had warned of a subdued quarter for Indian IT, citing deal wins, cautious client decision-making, and AI-led pricing pressure as major challenges.

The broker also noted that valuations remain near historic lows, with the sector's one-year forward P/E at 16.5x, significantly lower than its 10-year average of 21.8x. The NSE presently shows the index P/E at 19.85x. HDFC Securities has maintained a BUY rating on Infosys, with a target price of ₹1,250, and has favored Persistent Systems and Mphasis among mid-cap stocks. Conversely, the brokerage has downgraded Birlasoft to ADD and upgraded Cyient to BUY.