The NSE IT index jumped 2.3%, posting its best gains in a month, while the Nifty gained 0.7%. TCS, LTIMindtree, Tech Mahindra and Coforge emerged as the top gainers, rising about 3% each.
“We are observing renewed buying interest in information technology companies, as valuations have turned attractive following the recent correction,” said Arijit Malakar, equity research analyst, Ashika Stock Broking. “Most of the negative factors, including the US growth slowdown, tariff concerns and higher H-1B visa fees, appear to be largely priced in, limiting further downside risk at current levels.”
IT stocks have been under pressure in the past month as uncertainty over the fallout of the increase in the US H-1B visa fees on the sector has added to existing concerns over the impact of a downturn and growing AI dominance on the sector’s prospects.
AgenciesSushovon Nayak, research analyst at Anand Rathi Institutional Equities, said after an expected muted first half for IT firms, he believes the worst is now behind the sector. “While the recent H-1B visa fee hike may create short-term revenue pressure, the resulting shift of work offshore or nearshore could help improve margins and is structurally positive for IT,” he said.
Nayak also said AI adoption among enterprises is still at a nascent stage, and as it scales up, large Indian IT players are well-positioned to benefit from aiding this integration.In 2025, the Nifty IT index is down about 20%. All 10 stocks on the Nifty IT index are down this year between 2% and 29%. The Nifty has gained 6% this year. Sagar Shetty, research analyst at StoxBox, said the overall outlook for the IT sector remains cautious, with no clear signs of recovery yet. “In the second quarter, tier-I companies are expected to post modest, low single-digit growth, while midcap IT firms are likely to deliver relatively stronger performance,” he said. STOCK PICKS
Shetty said he prefers Persistent Systems and Coforge in this space, given their operational efficiency and AI integration.
“For high-risk investors, current levels may offer selective contrarian opportunities, whereas other investors may adopt a wait-and-watch approach until the environment improves,” he said. Nayak is positive on LTI Mindtree and Infosys among large caps and prefers Mastek, Mphasis, and Firstsource in the midcap space.
“We believe now is a good opportunity for investors to accumulate select IT stocks with a medium- to long-term view,” said Malakar. “We currently favour mid-cap IT firms over largecaps, given their strong presence in engineering and R&D services and greater domestic focus.” Within the mid-cap space, Malakar likes Coforge and Oracle, while Infosys remains his preferred pick among largecaps.
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