Indian IT stocks rallied in morning trade on Thursday, 15 October, as investors responded to strong quarterly results, improving sentiment around artificial intelligence (AI) services and a weaker rupee against the US dollar. HCLTech led the gains, while TCS, Tech Mahindra, Infosys, Wipro and other IT companies also advanced, pushing the Nifty IT index higher.
The Nifty IT index climbed 2.5% during the session, extending its rally to 9% over three trading sessions. The gains came as investors assessed the earnings reported so far in the September quarter and looked for signs that AI-related business was translating into stronger revenue growth and deal wins.
HCLTech was the top gainer, rising 3.5%. Tech Mahindra and TCS advanced more than 3% each, while Infosys gained 2.5%. LTM, Wipro and Mphasis rose between 1% and 2%.
Why are IT stocks rising?
Stronger-than-expected earnings from major IT companies have helped lift sentiment across the sector. Better-than-expected Q2 results from TCS and HCL Tech, a slowdown in the AI trade, and the US dollar’s rise against the rupee have all contributed to the upward momentum.
HCL Tech reported revenue of $3.72 billion in Q2FY27, an increase of 2% quarter-on-quarter (QoQ) and 2.2% year-on-year (YoY). The figure exceeded the $3.68 billion expected by a Bloomberg poll of 34 analysts.
In rupee terms, HCL Tech’s revenue rose 3% QoQ and 11.51% YoY to ₹35,620 crore. Its consolidated profit increased 21.18% YoY to ₹5,132 crore.
The company’s total deal bookings reached $3.3 billion, up 27% YoY, taking first-half bookings to a record high. HCL Tech also raised its FY27 revenue growth guidance to 2.5–4% in constant currency (CC) terms, compared with its earlier range of 1–4%.
Tata Elxsi’s September-quarter FY27 results also supported sentiment, with revenue and margins exceeding market estimates.
AI services provided another source of optimism. Infosys CEO Salil Parekh said AI services accounted for more than 8% of the company’s revenue in the second quarter and were growing at a double-digit rate sequentially. He estimated that AI revenues could drive almost half of the company’s work over the next two to three years.
TCS also reported strong numbers. Its consolidated net profit rose around 15% to ₹13,884 crore during the quarter, while revenue from core operations increased 11.2% YoY, according to its financial statements.
TCS’s total contract value (TCV), which measures the total value of deals secured during a period, reached $9.6 billion in the quarter ended September 2026. The company’s management also reported AI revenues of $3.1 billion in the September quarter, accounting for more than 10% of overall revenue amid continued industry demand.
What to watch next?
The focus will now shift to results and management commentary from other large IT companies. Investors will assess whether HCLTech’s performance points to a broader improvement in demand or reflects company-specific factors.
The sustainability of AI-led growth will also be important. Investors will look for evidence that rising AI revenues are translating into consistent revenue growth, stronger deal pipelines and improved business visibility across the sector.
After the Nifty IT index’s 9% rise in three sessions, the next set of earnings announcements and management guidance could help determine whether the rally has further room to run.
V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the correction in global AI stocks could support Indian equities by easing foreign investor outflows.
“The hotter-than-expected US inflation print which spiked from 3.4% in August to 3.7% in September has increased the possibility of yet another rate hike by the Fed in October,” Vijayakumar said.
He noted that concerns over another US Federal Reserve rate hike had triggered selling in the US market, dragging the Nasdaq down 1.88%. AI stocks bore the brunt, while Japan’s Nikkei fell more than 4% and South Korea’s Kospi declined over 7% in early trade.
Vijayakumar said foreign institutional investors (FIIs), who had been selling Indian stocks to buy AI shares, could halt or reverse the trend under favourable conditions. Possible reconsideration of long-term capital gains taxation in the upcoming Budget could also support market resilience. He added that strength in IT stocks following HCLTech’s results and expected healthy Q2 earnings from financial companies could bolster domestic equities.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
