Major Indian IT services companies, including Infosys Ltd, Tata Consultancy Services Ltd (TCS), Wipro Ltd, and HCL Technologies Ltd, saw their shares plummet to respective 52-week low levels on Wednesday. This significant downturn weighed heavily on the broader Nifty IT sub-index, which recorded a decline of 2.01 percent.
Beyond the market leaders, other prominent IT counters also experienced losses, with Coforge Ltd, Tech Mahindra Ltd, Persistent Systems Ltd, and Mphasis Ltd all settling lower during the trading session.
KPIT Technologies Leads Sectoral Decline
Among the hardest hit was KPIT Technologies, which emerged as the biggest drag on the sectoral index, with its stock also touching a 52-week low. The automotive software company faced considerable pressure after issuing a warning that its financial performance for the June quarter (Q1 FY27) would be weaker than initially projected. This revision was attributed to an unexpected slowdown in business from several European automakers.
The company further indicated that its Q2 FY27 performance is likely to remain similar to the subdued Q1 outlook. In response to this revised business forecast, global brokerage JPMorgan downgraded KPIT Technologies to 'Underweight' from its previous rating and sharply cut its target price from Rs 700 to Rs 550.
Persistent Systems and Market Outlook
Persistent Systems also remained under pressure as investors evaluated the company's proposed acquisition of Nagarro, a Munich-headquartered digital engineering firm. Persistent has agreed to acquire Nagarro for an enterprise value of EUR 1.27 billion.
Following this announcement, domestic brokerage Nuvama Institutional Equities downgraded Persistent to 'Hold', citing concerns over rich valuations. Meanwhile, Elara Capital maintained its 'Sell' rating on the stock.
Motilal Oswal Financial Services (MOFSL) offered a broader perspective on the IT sector, anticipating demand commentary to remain weak for the June quarter. The brokerage pointed to ongoing macroeconomic uncertainty, disruptions related to artificial intelligence (AI), and geopolitical challenges as factors continuing to suppress discretionary spending and decision-making by clients. MOFSL stated, "Against this backdrop, we build in tepid QoQ growth across our coverage universe for Q1 FY27, with the soft start likely extending into Q2 FY27 as well."