IT stocks rallied sharply on Tuesday, with HCLTech surging 6.02% and Tata Consultancy Services (TCS) gaining 5.17%, as strong quarterly results, rising artificial intelligence (AI) revenue and robust deal wins at HCLTech lifted sentiment across the sector.
HCLTech was trading at Rs 1,293.45, while TCS rose to Rs 2,236.95. Tech Mahindra advanced 3.50% to Rs 1,521.50, and Infosys climbed 2.52% to Rs 1,042.65.
The rally came after HCLTech reported a strong September-quarter performance, with higher profits, improved operating margins and a sharp increase in revenue from advanced AI services. The results helped revive investor interest in a sector that has faced concerns over global technology spending and the disruptive impact of AI.
HCLTech reported consolidated net profit of Rs 5,132 crore for the September quarter, up 21.2% year-on-year. Revenue rose 11.5% to Rs 35,620 crore, while its operating margin expanded to 18.2%, an improvement of 131 basis points over the previous quarter.
A key highlight was the company’s advanced AI business. Annualised revenue from advanced AI services rose 78% year-on-year to $876 million, signalling growing traction for its AI-related offerings.
The company also reported new deal bookings worth $3.26 billion, up from $2.57 billion a year earlier. It raised the lower end of its full-year FY27 revenue growth guidance to 2.5%, from 1% previously, while retaining the upper end at 4%.
The combination of stronger margins, higher deal bookings and improved revenue visibility helped make HCLTech the standout performer among major IT stocks.
The gains extended beyond HCLTech, suggesting that investors were buying into the broader IT pack rather than reacting only to one company’s results. TCS rose 5.17%, Tech Mahindra gained 3.50% and Infosys advanced 2.52%.
HCLTech’s performance has offered investors a fresh data point on the resilience of technology services demand, particularly as companies expand their AI-related offerings. Its deal wins and improving margins have also helped ease some concerns about growth and profitability.
However, the gains should not be read as proof that the challenges facing the sector have disappeared. Indian IT companies remain exposed to global client spending, especially in the US, and investors are watching closely to see whether AI creates new revenue opportunities quickly enough to offset pressure on traditional software and services businesses.
The focus will now shift to the earnings and outlook of other large IT companies for clues on whether HCLTech’s performance signals a broader improvement in demand. Investors will also look for evidence that AI services are translating into sustained revenue growth and stronger deal pipelines across the industry.
HCLTech’s results have provided a clear catalyst for the rally. Whether the gains last will depend on how much of that momentum is shared by the rest of the sector.