HCLTech, TCS, Infosys: IT stocks surge, NIFTY IT up 3.5% as early Q2 results show resilience; other factors to know

Indian IT services stocks were trading with impressive gains in early deals on Tuesday, October 13, as investor sentiment turned cautiously optimistic following HCLTech’s broadly in-line Q2 FY27 results, which highlighted resilience in its services business despite some concerns over growth.

The gains also follow TCS’ Q2 FY27 results last week, which were broadly in line with, or slightly ahead of, market expectations.

Analysts were divided on HCLTech following its results for the quarter ended September 30, 2026. While some highlighted resilient services growth, strong margins, AI revenue momentum and a recovery in deal bookings, others flagged slowing organic growth, weakness in the software business and premium valuations.

Nomura remained positive and raised its earnings estimates, while HSBC and CLSA maintained a neutral stance. JPMorgan and Citi remained cautious about growth and valuations, while Kotak Securities highlighted the margin surprise but flagged weakness in the products business.

How IT stocks were performing in early trade

The NIFTY IT index jumped as much as 3.52% to 29,349.10, with all 10 constituents trading in positive territory.

At 10:26 AM, HCLTech led the gains, rising 5.52%, followed by TCS, Infosys, Persistent Systems, and Tech Mahindra, which were trading between 2% and 5% higher.

Why are IT stocks rallying today? 5 key factors to know

HCLTech and TCS results support sentiment

HCLTech’s broadly in-line Q2 FY27 results and TCS’ results last week, which were broadly in line with or slightly ahead of expectations, have helped reassure investors about the sector’s resilience.

AI revenue momentum offers comfort

Growing AI-related revenue and continued investments in AI services could support future growth for IT companies. HCLTech’s AI business momentum and TCS’ expanding AI revenue pipeline remain important factors for investors.

Deal bookings point to demand resilience

Healthy deal wins and improving booking momentum suggest that clients continue to spend on technology services, even as some remain cautious about discretionary projects. This could improve revenue visibility for the coming quarters.

Investors assess global tech concerns

US technology stocks came under pressure on Monday after reports that OpenAI’s annualised revenue fell short of previously indicated levels, raising questions about the pace of AI monetisation.

This could prompt investors to differentiate between AI infrastructure companies and IT services firms, with the latter potentially benefiting if businesses continue to rely on external technology partners to implement AI solutions.

However, the impact on Indian IT services companies will depend on client spending and their ability to convert AI demand into revenue.

Buying at attractive valuations

After recent weakness in IT shares, some investors may be looking to buy at lower prices, particularly if Q2 results suggest that earnings are holding up better than feared. However, valuation comfort may vary across companies.

Short covering adds to gains

The sharp rise in IT stocks could also be amplified by traders covering existing short positions, which involves buying back shares they had sold in anticipation of a price decline. This is a possible explanation for the strength of the move, but it would need market-positioning data to confirm.