IT Stocks Rally Up to 15% Today: How TCS, L&T Technology, Wipro and Infosys Performed as Jefferies Sees Re-rating Room
- October 21, 2026
- Posted by: Chaitanya Auti
- Category: News
The IT stocks rally lifted Nifty IT to 32,287.80 at 11:15 AM IST on 21 Oct 2026, up about 2.4% from 31,516.30, against gains of 0.25% for Nifty 50 and 0.42% for Sensex. In the IT stocks rally, L&T Technology Services (LTTS) led at Rs 3,983.00, up 10.3%, after peaking near 14.5% (my calculation) at Rs 4,135.30, so the 15% in headlines is a peak and not a closing gain. Jefferies, as reported by Business Today, sees over 20% best-case re-rating potential in Infosys and TCS.
Quick Answer
The IT stocks rally is driven by strong results from LTTS, renewed hopes for traditional technology spending and a Jefferies note that sees selective re-rating room in large caps. At 11:15 AM IST TCS was up 2.8%, Infosys 2.9%, Wipro 3.6%, HCLTech 2.0% and LTTS 10.3%, so in this IT stocks rally only LTTS came close to the 15% in the headlines, and only at its intraday peak. Jefferies says current valuations imply constant currency revenue growth of just 1% to 3% a year over FY26 to FY36, but it rates Infosys Hold and TCS Underperform and warns that AI-led deflation can still hurt growth. After this jump, short-term readings for TCS and Infosys look stretched, so the next move depends on earnings and AI spending news.
The IT stocks rally came on a day when the broad market rose only modestly, which made the sector stand out. Nifty IT opened at 31,910.25, touched 32,347.30, a gain of 2.6% from the previous close (my calculation), and the IT stocks rally held near the top of that range through the morning.
This guide to the IT stocks rally covers index and stock moves, the LTTS result, what Jefferies said and where its targets sit against market prices, valuation, how stretched the rally looks and the risks. It is educational and not a recommendation to buy or sell any share.
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IT Stocks Rally Today: Index and Stock Performance
| Index or stock | Level at 11:15 AM IST | Change from previous close |
|---|---|---|
| Nifty IT | 32,287.80 | Up about 2.4% |
| Nifty 50 | 22,946.10 | Up about 0.25% |
| Sensex | 74,165.42 | Up about 0.42% |
| TCS | Rs 2,529.80 | Up 2.8% |
| Infosys | Rs 1,163.40 | Up 2.9% |
| Wipro | Rs 188.76 | Up 3.6% |
| HCLTech | Rs 1,407.50 | Up 2.0% |
| L&T Technology Services (LTTS) | Rs 3,983.00 | Up 10.3% |
Nifty IT is also about 1.1% above its 16 Oct close of 31,924.10 (my calculation). The IT stocks rally therefore reaches back to last week, with TCS up about 7.7% and LTTS about 8.0% from their 15 Oct closes, and Infosys about 4.8% (my calculation from daily closes).
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LTTS: Why It Led the IT Stocks Rally
| Item | Detail |
|---|---|
| Intraday peak | Rs 4,135.30, about 14.5% above the previous close (my calculation); reports say up to 15% |
| Price at 11:15 AM IST | Rs 3,983.00, up 10.3% |
| Q2 FY27 revenue | Rs 3,040.4 crore, up 12.1% year on year |
| EBIT margin | 16.3% |
| One-off item | A Rs 165 crore gain from the sale of the SWC business |
| Interim dividend | Rs 20 per share, record date 27 Oct 2026 |
| Price to earnings | 28.97 against an industry figure of 17.46 |
I have left out reported net profit because the sources I saw disagree on the unit, with figures of Rs 5,482 crore and Rs 548.2 crore in circulation, so check the filing. At a price to earnings of 28.97, LTTS trades about 66% above the industry figure (my calculation), which means expectations are already high. Its move is the main reason the IT stocks rally looks so strong, since large caps rose by 2% to 3.6%.
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What Jefferies Said During the IT Stocks Rally
| Stock | Jefferies view (as reported) | Target | Gap to 11:15 AM price (my calculation) |
|---|---|---|---|
| Infosys | Hold, best-case re-rating above 20% | Rs 1,160, raised from Rs 1,020 | About 0.3% below |
| TCS | Underperform, best-case re-rating above 20% | Rs 2,125, raised from Rs 1,800 | About 16% below |
| HCLTech | Rating not stated | Rs 1,150 | About 18% below |
| Coforge | Rating not stated | Rs 2,040 | No live price checked |
| Tech Mahindra | Rating not stated | Rs 1,540 | No live price checked |
| Sagility (mid-cap) | Best-case re-rating above 50% | Not stated | Not applicable |
Jefferies puts the best case for large caps at 15 to 22 times earnings and for mid-caps at 22 to 47 times. In the worst case, with no growth beyond FY29, it sees IT stocks at 12 to 13 times earnings. It says risk and reward turn unfavourable beyond 17 to 18 times earnings. It also says worse sentiment on global AI capital spending could support a re-rating if there are no more negative growth surprises.
Two points need care. The headline says Jefferies is bullish, but the ratings I could verify are Hold on Infosys and Underperform on TCS, so the bullishness is about re-rating potential and not a buy call. I could not confirm the rating, date or reasoning for the Rs 1,150 HCLTech figure, which sits well below the market price, so treat it with caution.
Valuation Check After the IT Stocks Rally
| Stock | Price to earnings | Dividend yield | Industry price to earnings |
|---|---|---|---|
| TCS | 17.17 | 4.47% | 17.46 |
| Infosys | 15.12 | 4.24% | 17.46 |
| Wipro | 13.63 | 6.40% | 17.46 |
| LTTS | 28.97 | 1.61% | 17.46 |
TCS at 17.17 times earnings already sits inside the 17 to 18 times zone that Jefferies calls unfavourable, which is my reading of its note. Infosys and Wipro are lower, and the dividend yields shown are as listed by the data feed and may include special payouts. After an IT stocks rally of this size, lower-looking multiples are less of an argument than they were a week ago.
How Stretched Is the IT Stocks Rally?
| Stock | 14-day RSI | 50-day average | Price versus average (my calculation) |
|---|---|---|---|
| TCS | 88.4 | Rs 2,244.69 | About 12% above |
| Infosys | 71.3 | Rs 1,086.30 | About 7% above |
A reading above 70 on the relative strength index is usually seen as overbought, and TCS at 88.4 is far above that line. This does not predict a fall, since strong trends can stay overbought, but it does mean the easy part of the IT stocks rally may be behind. Wipro, HCLTech and LTTS were not checked for these readings.
Risk: Jefferies itself notes that recovery is not assured. AI-led deflation can weigh on growth, global spending can slow and a strong rupee or weak demand can hurt margins, so a one-day IT stocks rally is not a trend.
What to Watch Next for IT Stocks
- Whether Nifty IT holds above its 16 Oct close of 31,924 over the next sessions
- Q2 results and deal wins from the remaining large IT companies that could extend the IT stocks rally
- Commentary on AI spending and pricing pressure
- Whether TCS and Infosys cool off from their stretched readings or the IT stocks rally keeps running
- Any change in Jefferies ratings or targets
Conclusion
The IT stocks rally is real but narrower than the headline suggests, since 15% was the LTTS peak and large caps gained 2% to 3.6% by late morning. Jefferies sees re-rating room but keeps Hold and Underperform ratings on the two largest names, so compare targets, valuation and your own risk before acting.
Disclaimer: Data and figures in this article are sourced from publicly available information. These may or may not be accurate. Please verify all data with the official NSE (nseindia.com) and BSE (bseindia.com) websites before making any investment decision. Investments in securities are subject to market risk. This content is for educational purposes only and is not investment advice by Univest (SEBI RA INH000013776).
Frequently Asked Questions
Why are IT stocks rallying today?
Ans. The IT stocks rally comes as Nifty IT is up about 2.4% on 21 Oct 2026 after strong results from LTTS and renewed hopes for traditional technology spending. A Jefferies note that sees selective re-rating potential in Infosys and TCS added to sentiment.
Did IT stocks really rise 15% today?
Ans. In the IT stocks rally only LTTS came close, and only at its intraday peak of about Rs 4,135.30, roughly 14.5% above the previous close. At 11:15 AM IST LTTS was up 10.3%, while TCS, Infosys, Wipro and HCLTech were up between 2.0% and 3.6%.
How are TCS, Infosys, Wipro and HCLTech performing in the IT stocks rally?
Ans. At 11:15 AM IST TCS was at Rs 2,529.80 (up 2.8%), Infosys at Rs 1,163.40 (up 2.9%), Wipro at Rs 188.76 (up 3.6%) and HCLTech at Rs 1,407.50 (up 2.0%). Prices move through the day, so check live quotes.
What did Jefferies say about Infosys and TCS?
Ans. As reported, Jefferies rates Infosys Hold with a target of Rs 1,160 and TCS Underperform with a target of Rs 2,125, and sees over 20% best-case re-rating potential in both. It also says risk and reward turn unfavourable beyond 17 to 18 times earnings.
Is the IT stocks rally overextended?
Ans. Short-term readings suggest so for some names, with a 14-day RSI of 88.4 for TCS and 71.3 for Infosys. Overbought readings can persist, so they are a caution and not a forecast.
What is the biggest risk to the IT stocks rally?
Ans. Jefferies points to AI-led deflation weighing on growth and says recovery is not assured. Weak global demand, pricing pressure and a fade in sentiment can also reverse a sector move.
Which IT stocks does Jefferies see the most re-rating room in?
Ans. Jefferies names Infosys and TCS among large caps with over 20% best-case re-rating and Sagility among mid-caps with over 50%. These are best-case ranges and not forecasts, and worst-case multiples are 12 to 13 times earnings.
Is this article investment advice?
Ans. No. It is educational and not a recommendation to buy or sell. Please check the figures against company filings and your own risk profile before you act on anything you read here.