Coforge, Tech Mahindra, Persistent Systems, Oracle Financial Services Software, and Mphasis were among the tech stocks that continued to rally in Monday’s trade on May 18, even as the broader markets remained range-bound.
According to analysts, the continued weakness in the domestic currency and the sector’s transition into a defensive hedge are aiding the recovery rally in tech stocks.
Coforge led today’s gains with a 4.4% surge, while Tech Mahindra advanced 4.1%. Persistent Systems, Oracle Financial Services Software, Mphasis, and Infosys were also trading higher, with gains ranging between 1% and 4.1%.
Overall, all 10 constituents of the NIFTY IT index were trading in the green. Tracking gains in large-cap stocks, the index rose 2.4% to the day’s high of 28,358. Today’s advance followed a 1.3% gain in Friday’s session.
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, structural concerns surrounding AI disruption and slower discretionary global tech spending continue to cap aggressive upside in the sector.”
Although tech stocks have recovered from their recent lows, they have remained under pressure for much of 2026. The sell-off began in February following the rollout of Anthropic’s Claude Code and concerns that rapid advances in generative AI could disrupt demand for traditional IT and professional services.
The weakness extended further after OpenAI announced plans to launch a new company backed by more than $4 billion, aimed at embedding engineers within organisations to identify areas where AI can deliver the greatest impact.
Indian IT companies derive a significant portion of their revenue from North America and are considered highly sensitive to US economic uncertainty and corporate technology spending trends.
India’s top-tier IT firms also largely failed to meet Street expectations in their March-quarter earnings and guidance for the new financial year, further worsening sentiment. This triggered a sharp unwinding of positions by overseas investors, making the tech sector one of the worst-performing sectors in 2026.
India’s IT stocks have declined 25.3% so far this year, making them the country’s worst-performing sector, compared with a 9.7% decline in the benchmark NIFTY 50.
Muted growth outlook remains a key overhang for Indian IT stocks
The earnings performance of Indian IT companies was mixed and slightly weaker for some players. However, the bigger concern for investors was the growth guidance issued by several IT majors for FY27.
HCL Technologies has forecast revenue growth of 1–4% in constant currency terms for FY27, lower than its initial guidance range of 2–5% in the previous financial year.
Infosys also expects revenue growth to moderate in the current financial year, guiding for 1.5%–3.5% growth in constant currency terms. In FY26, the company had projected revenue growth of 3%–3.5% in constant currency. However, Infosys has maintained its operating margin guidance at 20%–22% for FY27.
Meanwhile, Wipro projected IT services revenue in the range of $2,597 million to $2,651 million for Q1FY27, implying sequential growth of -2% to 0% in constant currency terms.
On the other hand, Tata Consultancy Services (TCS) reported relatively healthy numbers, with the management expecting international revenue growth in FY27 to be higher than FY26, supported by a strong deal pipeline and recent client wins.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
