TCS, TechM, other IT shares fall up to 3% ahead of Q3 results; brokerages expect another tepid quarter

Stock Market Today: TCS, TechM, Infosys and other IT shares see profit booking.

• Major IT stocks fell up to 3 percent ahead of December quarter earnings season
• Nifty IT index dropped 12.6 percent in 2025, worst among Indian market sectors
• Brokerages expect muted Q3 results due to weak US demand and holiday shutdowns

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Shares of major information technology firms fell up to 3 percent in intraday trade on Thursday amid broad-based selling in the sector ahead of the December quarter earnings season.

Tata Consultancy Services led the decline, slipping as much as 3 percent, while Oracle Financial Services Software dropped up to 2 percent. Wipro and Tech Mahindra fell 2.14 percent and 2.07 percent, respectively.

Coforge, Mphasis, LTIMindtree and Persistent Systems were also trading lower, declining up to 2 percent. Nine out of the 10 constituents of the Nifty IT index were in the red.

The profit booking comes ahead of the start of the third quarter earnings season on January 12, when Tata Consultancy Services and HCLTech are scheduled to announce their results.

Brokerages expect another muted quarter for Indian IT firms as weak demand in the United States and holiday-period client shutdowns continue to weigh on technology spending.

On average, the top six IT firms by revenue are expected to report about 4 percent year-on-year revenue growth and a 5 percent rise in profit for the December quarter, compared with revenue growth of 6.5 percent in the September quarter, according to nine brokerages.

Indian software exporters last reported double-digit revenue growth in the March quarter of 2023, when demand for digital transformation, cloud adoption and remote working surged in the post-pandemic period.

The $283-billion Indian IT industry continues to face macroeconomic headwinds, including uncertainty over US tariffs, concerns over proposed visa fees and subdued client spending amid worries about economic growth in the United States.

The US remains a key market for Indian IT firms, accounting for a significant share of their revenue.

Sector bellwether Accenture recently beat Wall Street expectations on AI-led demand, but maintained its growth outlook, indicating a cautious near-term environment.

Although India does not have pure-play AI companies, IT firms are shaping AI strategies through acquisitions and partnerships. Brokerages expect AI-related momentum to build over the next six months, with demand improving into 2026.

Foreign investors pulled out a record USD 8.5 billion from IT stocks in 2025 due to tariff uncertainty, visa concerns and weak spending, accounting for nearly half of total foreign outflows from Indian equities.

The Nifty IT index fell 12.6 percent in 2025, making it the worst-performing sector as Indian markets underperformed Asian and emerging market peers.

Tata Consultancy Services is expected to report about 4.2 percent year-on-year revenue growth for the December quarter, slower than the 5.6 percent growth reported in the same period last year.

Infosys and HCLTech are forecast to post revenue growth of about 8.1 percent and 4.6 percent, respectively, compared with 7.6 percent and 5.1 percent a year ago.

Most brokerages do not expect HCLTech to revise its fiscal 2026 revenue growth guidance of 2–3 percent, or Infosys to raise its forecast of 3–5 percent.

(Inputs from Reuters)

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