TCS, Infosys, HCLTech, Wipro, TechM: IT Stocks Gain Up to 3.5% Today; Nifty IT Jumps 9% in 3 Days: What's Driving the Rally?

The rally in IT stocks is the main story on Dalal Street on Thursday. After a long period of underperformance, IT stocks such as TCS, Infosys, HCLTech, Wipro and Tech Mahindra have all jumped, and the Nifty IT index has risen about 9% in three sessions.

This guide covers the size of the move, the three drivers, the TCS and HCLTech results, how stocks have performed over a week, the risks and the levels to watch. Sources differ on some figures for IT stocks, and I flag those.

A rally of this size in IT stocks raises the question of whether it can last, and the sections below treat that as an open question.

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IT Stocks: How Big Is the Rally?

Item	Level	Note
Nifty IT on 15 Oct	Up about 2.5% to 2.6%	Top sector; the Nifty 50 was up 1.29% at 10:36 am
Three-session gain	About 8.89% to 9%	Since Tuesday; reports of 8.3% to 9% differ by time of day
Tuesday 13 Oct	Up about 5.2%	Best single day in over 17 months, led by HCLTech and TCS
Nifty IT intraday high on 14 Oct	30,377.15	Up 1.8% from the previous close of 29,830.10
Neckline resistance	About 32,000	About 5.3% above 30,377 (my calculation)
Constituents higher	8 of 10	At 10:36 am

One report counts the gain as 9% over five days to 14 October, while others count 9% in three sessions to 15 October. The time windows differ, which is why the figures vary, and both agree that the rally in IT stocks is sharp.

Risk: After a 9% jump in three sessions, IT stocks can give back some of the gain quickly if sentiment turns.

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IT Stocks Today: Who Gained and by How Much

Stock	Move on 15 Oct (morning)	One week to 14 Oct	14 Oct intraday high
Tech Mahindra	Up 3.4%	Up 4.4%	Rs 1,566.70
HCLTech	Up 3.1%	Up 12.8%	Rs 1,453.70
TCS	Up 2.8%	Up 11%	Rs 2,335.80
Infosys	Up 2.6%	Up 9.6%	Rs 1,089.80
Wipro	Not reported	Up 7.6%	Rs 171.80
LTM	Not reported	Up 8.8%	Rs 4,308
Coforge	Not reported	Up 6.2%	Rs 1,964.90
Persistent Systems	Not reported	Up 8%	Rs 6,078

The headline says IT stocks gained up to 3.5%, while the morning data I found shows a top gain of 3.4% for Tech Mahindra, so the 3.5% is probably a later reading. The one week returns are to 14 October and do not include Thursday's gains.

HCLTech and TCS have the largest weekly gains among the large cap IT stocks, which matches the results driven start to the rally.

Risk: Stocks that have risen 10% or more in a week can be volatile around results.

Driver 1: The Reversal of the AI Trade

Point	Detail
View	Sunny Agrawal of SBI Securities cites rising debt in AI related businesses, rising bond yields and profit booking in the US and Korea
Second view	Narendra Solanki of Anand Rathi calls Indian IT an anti-AI trade
Evidence	AI chip stocks such as SK Hynix and Samsung fell from their highs on valuation and spending worries
Counter view	Ponmudi R of Enrich Money says AI is becoming a revenue opportunity and not only a disruption risk

The first driver is rotation. As investors sell expensive AI hardware stocks, money has moved to IT stocks, meaning services companies that were seen as AI losers. The Nasdaq fell 1.88% on Wednesday, yet IT stocks rose, which fits the idea of a switch within technology.

These are analyst opinions, and the article they come from notes that they are not the publisher's views.

Risk: If the AI hardware trade recovers, money could flow back and reverse the rotation.

Driver 2: Q2 Results That Were In Line

Item	TCS	HCLTech
Profit growth	About 15% to Rs 13,884 crore	21.2% in one report; about 11% in another
Revenue growth	11.2% year on year (core operations)	11.5% year on year and 3% sequentially
Margin	Not stated here	EBIT margin of 18.2%
Order wins	Total contract value of 9.6 billion dollars	Not stated here
AI	Annualised AI revenue of 3.1 billion dollars, over 10% of revenue	Not stated here
Guidance	Not stated here	FY27 revenue guidance cut to 2.5% to 4% in constant currency (one report)

The two reports disagree on HCLTech's profit growth, 21.2% against about 11%, so I show both. The one that mentions a guidance cut says earnings were in line to slightly ahead. Infosys CEO Salil Parekh said AI services were over 8% of Q2 revenue, growing at a double digit rate from the previous quarter.

Tata Elxsi's results, which beat estimates on revenue and margins, also helped sentiment in IT stocks. The rally in IT stocks shows relief that results had no major surprises, because the market had feared worse.

Risk: A cut in guidance, as reported for HCLTech, shows that growth is still modest.

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Driver 3: Valuations and Dividend Yields

Point	Detail
Price to earnings	Most large traditional IT services firms trade at 12 to 18 times
Dividend yields	3% to 5%
Cash flows	Described as robust
Rupee	The headline says weaker; the rupee gained 24 paise to 94.92 on the day, but it is weak by level at about 95 per dollar

Low relative to history is a common reason for a bounce, but valuation alone does not start a rally. The weaker rupee argument is mixed: a rupee near 95 per dollar helps exporters over time, but on 15 October it strengthened, so it was not the trigger for that day.

Risk: A low multiple for IT stocks can stay low if growth stays weak, so valuation is not a reason on its own.

Is the IT Stocks Rally Sustainable?

The next question for IT stocks is whether the move can last beyond the results week.

Argument for	Argument against
Results without negative surprises	HCLTech cut its FY27 revenue guidance
AI revenue is growing, with TCS at 3.1 billion dollars annualised	One analyst calls it a relief rally, not a confirmed turnaround
Valuations of 12 to 18 times and yields of 3% to 5%	US inflation rose to 3.7% from 3.4%, raising rate hike fears
A possible breakout if Nifty IT closes above 32,000	Foreign investors sold Rs 1,857.44 crore on Wednesday
Rotation out of AI hardware	Wipro and Tech Mahindra results on 15 October could disappoint

Ponmudi R of Enrich Money says sustained upside needs stronger US technology spending, steady deal conversion and better revenue growth. Vipin Kumar of Globe Capital says a decisive close above 32,000 would confirm an inverted head and shoulders breakout, while the index moves gradually towards it.

Risk: A technical breakout call depends on a close above 32,000, which has not happened yet.

What to Watch Next for IT Stocks

1. Wipro and Tech Mahindra results, which can move IT stocks, and guidance on 15 October
2. Infosys and HCLTech guidance after the Q2 numbers
3. Nifty IT against 30,377 and the 32,000 neckline
4. US inflation, bond yields and the Fed meeting on 28 October
5. Foreign investor flows into IT stocks and the rupee near 95 per dollar

Conclusion

IT stocks have rallied about 9% in three sessions on a rotation out of AI hardware, in-line results and low valuations. The weaker rupee in the headline is not supported by the day's data, and the rally needs growth and guidance to hold.

Frequently Asked Questions

Why are IT stocks rising today?

Ans. Analysts cite a rotation away from the AI hardware trade, Q2 results from TCS and HCLTech that were in line, and valuations of 12 to 18 times earnings with dividend yields of 3% to 5%.

How much has Nifty IT risen?

Ans. About 2.5% on 15 October 2026 and about 9% in three sessions. It rose about 5.2% on Tuesday, its best day in over 17 months.

Which IT stocks gained the most on 15 October?

Ans. Tech Mahindra rose 3.4%, HCLTech 3.1%, TCS 2.8% and Infosys 2.6% in the morning.

What were the TCS Q2 results?

Ans. Profit rose about 15% to Rs 13,884 crore, revenue grew 11.2% in core operations, total contract value was 9.6 billion dollars and annualised AI revenue was 3.1 billion dollars.

Did HCLTech cut its guidance?

Ans. One report says HCLTech lowered its FY27 revenue guidance to 2.5% to 4% in constant currency. Reports differ on its profit growth, 21.2% against about 11%.

Is the rupee behind the IT rally?

Ans. The headline cites a weaker rupee, but the rupee gained 24 paise on 15 October. A rupee near 95 per dollar helps exporters over time, so it is a background factor and not the trigger.

Is the rally sustainable?

Ans. It depends on US technology spending, deal conversion and revenue growth. One analyst calls it an earnings-led relief rally and not a confirmed turnaround.

Is this article investment advice?

Ans. No. It is educational and not a recommendation to buy or sell.