Indian IT Stocks Gain Up to 4% After Eight-Week Losing Streak

| 24 articles from The Times of India

What's Happening

Indian IT stocks, including Infosys, TCS, and HCL Tech, climbed by as much as 4% on March 18. Global brokerage CLSA stated that it does not observe any AI-linked pricing pressure in IT contract renewals, though it noted some client decision delays.

How We Got Here

In February 2026, foreign institutional investors sold IT shares worth approximately Rs 17,000 crore, according to NSDL data, accelerating a downturn in the sector. During the same month, the PPFAS Flexicap Fund took a contrarian position, increasing its holdings in HCL Tech, Infosys, and TCS amid a 20% monthly drop, based on portfolio disclosures. This early phase highlighted divergent investor sentiments as institutional selling pressure met domestic fund accumulation, setting the stage for ongoing volatility and analyst scrutiny. From February 24, a series of analyst recommendations reflected diverse views on individual stocks. Jefferies analysts issued a buy recommendation for IDFC First Bank with a target price of Rs 100, noting a suspected fraud investigation at its Chandigarh branch. Morgan Stanley analysts assigned an underweight rating to Dixon Technologies with a Rs 8,157 target, citing DRAM spot price surges as a headwind. Nuvama analysts downgraded UPL to hold with a Rs 816 target after a restructuring announcement, while Macquarie analysts initiated coverage of Torrent Pharma with an outperform rating and Rs 5,000 target, expecting accelerated growth from an acquisition. On February 25, Mehul Kothari of Anand Rathi Shares and Stock Brokers issued buy recommendations for Tata Chemicals, IRCTC, and Colgate-Palmolive based on technical analysis, providing specific buy ranges, stop-loss levels, and price targets. The same day, seven wealth and fund managers from brokerages including Motilal Oswal and HSBC Mutual Fund compiled investment strategies for a 1 lakh rupee portfolio, generally recommending a diversified, multi-asset approach with allocations across equities, debt, and gold amid market volatility. This emphasis on long-term wealth creation continued on February 26 with Aakash K Hindocha of Nuvama Professional Clients Group issuing buy recommendations for Colgate-Palmolive, Tata Motors Passenger Vehicles, and JSW Steel with detailed price levels. Bajaj Broking Research recommended buying Colgate-Palmolive shares in the range of Rs 2265-2305 with a target of Rs 2470 over six months on February 27, citing a technical breakout from a seven-month falling wedge pattern. It also advised buying Varun Beverages in the range of Rs 455-463 with a target of Rs 519 over twelve months, citing management's double-digit growth outlook. On March 4, Mehul Kothari recommended Bharat Electronics Limited, Oil India Limited, and Multi Commodity Exchange of India as top picks with technical analysis. By March 6, Bajaj Broking Research advised buying Bharti Airtel shares in the range of Rs 1880-1910 with a target of Rs 2057, and Tata Power Company shares in the range of Rs 370-380 with a target of Rs 413. A pivotal dispute emerged on March 11, when brokerage houses presented opposing assessments of artificial intelligence's impact on the IT sector. Jefferies warned that AI could structurally change the IT business mix towards consulting and implementation, increasing cyclicality and risks, leading it to downgrade several stocks and cut price targets. In contrast, Nuvama argued that concerns about AI are overstated, seeing no existential threat and potential market expansion, and it advised investors to accumulate all top 10 IT stocks, projecting potential upside of 14% to 84% over the next 12 to 15 months. This division underscored the uncertainty surrounding technological disruption and its financial implications. The debate unfolded against a backdrop of sustained market pressure. On March 13, India's Nifty IT index was on track to end Friday in negative territory for the eighth consecutive week, erasing nearly Rs 7.7 lakh crore in market value and pushing total capitalization below Rs 25 lakh crore. Bajaj Broking Research stated that the Nifty index might consolidate between 23,400 and 24,300, with immediate resistance at 24,000 and 24,300. This prolonged decline set the stage for a rebound on March 18, when shares of major IT firms including Infosys, TCS, and HCL Tech climbed by as much as 4%. Global brokerage CLSA reaffirmed its 'Outperform' stance, stating it does not observe any AI-linked pricing pressure in IT contract renewals but flagging some delays in client decision-making, pointing to ongoing cautious optimism.

Timeline

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