Coforge, Persistent Systems: Midcap IT stocks fall up to 3%; NIFTY IT slips over 1% on Friday, February 20; details to know

The NIFTY IT index traded over 1% lower at 31,919.30 levels. All 10 constituents were trading in the red, with Persistent Systems falling the most.

According to analysts, these global peers are often viewed as proxies for Indian midcap IT firms, and their performance could influence sentiment in the domestic space.

What happened overnight?

EPAM Systems plunged 17% on the New York Stock Exchange after issuing a cautious outlook that disappointed investors.

While the company forecast first-quarter results broadly in line with estimates, its conservative guidance weighed on sentiment, triggering a sharp sell-off in the stock.

Analysts at Jefferies, according to news reports, noted that the 2026 revenue guidance of 3–6% year-on-year organic growth (in constant currency terms) likely reflects some degree of conservatism. However, they added that the outlook may still be seen as underwhelming, given the company delivered 5% organic constant currency growth in 2025.

What investors in Indian IT midcap stocks need to know

Weak results from EPAM Systems could weigh on sentiment across Indian IT stocks, but the impact may vary. Large caps such as Infosys and Tata Consultancy Services are relatively better placed due to diversified revenue streams and stronger deal pipelines.

However, midcap IT players like Coforge and Persistent Systems could face sharper volatility, given their higher exposure to discretionary tech spending and premium valuations, analysts note.

AI-led risks continue

The US stock market ended lower on Thursday, following mixed profit reports from Walmart and other big companies. It also felt pressure from oil prices, which rose on renewed worries about a potential conflict between the United States and Iran.

The Dow Jones Industrial Average lost 267.50 points, or 0.54%, settling at 49,395.16. The broad-based S&P 500 slipped 0.28% and ended at 6,861.89. The Nasdaq Composite lost 0.31% and closed at 22,682.73.

Booking Holdings dropped 8% during the session even though the company behind the Booking.com, Priceline and OpenTable brands reported a profit for the latest quarter that edged past analysts' expectations, as per a report by AP.

Its stock has been under pressure lately because of worries that competitors powered by artificial-intelligence technology could upend its industry and take away customers at some point.

Such worries have been rolling through the US stock market recently, hitting industries as far-flung as software and legal services and trucking logistics.

Investors have so suddenly and aggressively been punishing stocks of companies seen as under threat that analysts have likened it to a “shoot first, ask questions later” mentality.