IT stocks hogged the limelight in an otherwise lacklustre trade on Tuesday, 19 May, as they rallied up to 5%, driving the IT pack higher for the third day in a row. The Nifty IT index jumped over 4% to 29,566 on the NSE, taking its three-day bull run to 8%. It had risen nearly 2.5% on Monday and 1.3% last week on Friday.
All constituents of the pack traded in the green, with Coforge emerging as the top performer as it rose nearly 5%. It was followed by Infosys and LTIMindtree, both gaining over 4%. Tech Mahindra, Persistent, OFSS, HCL Technologies, and TCS were trading higher by 3% or more. Meanwhile, Wipro was up 2%.
Why are IT stocks rising?
Analysts attribute renewed investor interest in the to the sharp depreciation in the Indian rupee and value buying after heavy selling in the first quarter of the calendar year.
A raised expectations of better profit growth for companies that earn a large share of revenue in the greenback.
Mahesh M Ojha, VP Research & Business Development at Kantilal Chhaganlal Securities, said three factors are driving the IT stocks: 1) rupee depreciation; 2) AI costs are still slightly higher than human labour, and 3) stocks have already corrected significantly, and dividend yields are attractive at these levels for companies like TCS and others.
“These are the main reasons why the is recovering, and we remain optimistic about further upside. Since IT has already performed well recently, there could be some consolidation, but there is still room for more upside,” Ojha added.
Hariprasad K, SEBI-registered research analyst and founder of Livelong Wealth, said, “IT stocks are slowly transitioning from being viewed purely as a cyclical growth sector to a relative defensive hedge due to rupee depreciation benefits and resilient export earnings visibility”
However, he cautioned that structural concerns surrounding AI disruption and slower discretionary global tech spending continue to cap aggressive upside in the sector.
IT stocks among worst performers in 2026
While IT stocks are displaying signs of recovery in the last few sessions, they have faced a heavy selloff this year, crashing over 22% on a year-to-date basis, in the face of rising disruptions due to several . Investors remain concerned that rapid advances in generative AI could disrupt demand for traditional IT and professional services.
Furthermore, the March quarter results for FY26 were mildly disappointing after relative stability in the preceding few quarters. The combination of minor misses in growth estimates, unexciting TCV, guidance below expectations and the reality of GenAI-led revenue deflation will keep pressure on multiples intact, said Kotak Institutional Equities (KIE).
Most IT companies missed growth estimates, while the guidance for the new fiscal year also disappointed, triggering a sharp selloff in these stocks and making it one of the worst-performing sectors of 2026.
grew 1.2% QoQ, leading growth among Tier 1, followed by Tech Mahindra at 0.6%. Revenue declined sequentially for , HCL Technologies and Wipro. Mid-tier outperformed Tier-1 and grew 1.2-3.4%, according to KIE.
Revenue growth guidance was subdued across most companies, given expectations of a lift from lower tariff-related uncertainties.
“Subdued guidance takes into account multiple headwinds—AI-driven deflation, pricing pressure due to high competitive intensity, macro headwinds from Middle East war situation, client-specific issues, etc,” added the brokerage.
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