Indian IT Sector Shows Strong Rebound
After a notable period of correction, India's information technology (IT) sector is experiencing a significant rebound, with major players like Tata Consultancy Services (TCS) and Infosys leading the charge. The benchmark NSE IT index has seen a 6 percent jump from its decade-long rising trendline support, signaling a potential bounce from oversold conditions.
In recent trading sessions, Infosys shares climbed 7 percent, while TCS, the largest software exporter, recorded a 3 percent gain. Other prominent IT firms also saw upward movement, with Wipro and HCL Technologies Ltd each rising 4 percent, and Tech Mahindra Ltd advancing 6 percent.
Favorable Risk-Reward Setup Emerges
According to analysis by ICICI Securities, the NSE IT index underwent a 42 percent correction over the past six quarters, approaching its long-term rising trendline. This historical alignment, the brokerage noted, presents a highly favorable risk-reward opportunity at the current market juncture.
Hariprasad K, SEBI-registered Research Analyst and Founder at Livelong Wealth, emphasized the IT sector's role as a defensive pocket within the broader market. He highlighted that persistent weakness in the Indian rupee is likely to bolster technology exporters like Infosys and TCS, as a depreciating domestic currency enhances earnings visibility for export-oriented businesses.
IT Budgets and Valuation Insights
A recent UBS Evidence Lab survey indicated that IT budgets are projected to grow by an average of 4.1 percent over the next 12 months. While slightly lower than the 4.6 percent forecast in an October 2025 survey, this still suggests a mid-single-digit growth in tech spending, with IT services expected to grow broadly in line with overall budgets.
Pankaj Murarka, Founder & CIO at Renaissance Investment Managers, finds valuations for IT stocks particularly attractive, citing strong growth potential. His firm, managing close to Rs 5,000 crore in assets, maintains approximately 10 percent exposure to the IT sector. Murarka described IT companies as high-quality, cash-generating entities with robust balance sheets and minimal leverage.
Arihant Capital Markets also weighed in, stating that Indian IT stocks offer a compelling buying opportunity, trading at a substantial 30 percent discount to their three- and seven-year historical average price-to-earnings (P/E) multiples. The brokerage reiterated that the ongoing depreciation of the rupee provides a direct and meaningful earnings tailwind for these companies, as they predominantly earn in USD while incurring costs in INR.