IT Stocks: India has increasingly emerged as what Chris Wood of Jefferies describes as the “reverse AI trade”, a theme he has discussed earlier in the GREED & Fear report.
A key positive catalyst came with the announcement of a strategic tie-up between Anthropic and Infosys to jointly develop custom AI agents tailored to the needs of individual enterprises. It reinforces the idea that corporates are moving toward small, purpose-built language models rather than relying solely on large, generic AI platforms.
“This development reinforces what we were told on the ground in India, namely that corporates are likely to build smaller language models using proprietary datasets, with Indian IT services firms playing a central role in helping clients migrate to this new AI architecture,” Chris Wood said in the GREED & Fear report.
IT Stocks fall today
The Nifty IT index slipped 1.2% in today’s session, trading just over 2% above its 52-week low of 30,918.95. This marked the third consecutive day of decline for the index, which has now fallen 4% over the past three sessions. In contrast, the benchmark Nifty index advanced 0.6% during the session.
So far in 2026, the Nifty IT index has declined 16.5%, significantly underperforming the broader market, as the Nifty has slipped only 1.5% over the same period.
On a longer-term basis, the IT index has dropped 22% over the past one year, 14% in the last three months, and 17% in the past one month, highlighting sustained weakness across the sector.
All constituents of the Nifty IT index were trading in the red. Coforge emerged as the top loser, sliding 2.5%, followed by LTI Mindtree, which fell 2%. Shares of Mphasis, Wipro, Infosys and Tech Mahindra declined by more than 1% each. Persistent Systems, HCL Tech, L&T Technology Services and TCS were also lower, shedding over 0.5% apiece.
Why AI adoption may stabilise Indian IT services
According to Chris Wood, this shift is important because it repositions Indian IT companies as enablers of AI adoption, rather than victims of it. Infosys disclosed that 90% of its top 200 large clients are already using its AI services, underlining that enterprise demand is not theoretical but actively building.
This narrative comes at a time when Indian IT stocks have significantly underperformed.
“This matters from a market perspective because it challenges the assumption that Indian IT services are inevitable losers from AI, which has been a key reason for their severe underperformance both domestically and versus global emerging markets,” Chris Wood wrote in the GREED & Fear report.
Beyond markets, the implications extend to the broader economy. The IT services sector employs around 5.8 million people, making it a crucial pillar of India’s white-collar employment base. While hiring momentum has slowed sharply, the sector still added a net 126,000 jobs in FY25, compared with 445,000 jobs in FY22.
“That should ease concerns about the macro risk of a sudden implosion in IT services, which would otherwise have serious negative multiplier effects through job losses, consumption, and confidence in the Indian economy,” Chris Wood said.
Adding to the optimism, Infosys recently held its Investor AI Day in Bengaluru, where it unveiled its “AI First” services strategy. According to Jefferies’ analysis, these offerings could address a potential market opportunity of $300–400 billion by 2030, highlighting that AI may yet become a growth lever rather than a threat for Indian IT.
For investors, the takeaway is clear: while AI disruption fears have weighed heavily on valuations, emerging evidence suggests that Indian IT services firms may still carve out a meaningful role in the next phase of enterprise AI adoption.
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.
