Infosys, Coforge: IT stocks tumble over 8% even as firms report decent numbers; NIFTY IT index down 2%

Analysts note that discretionary spending remains weak and margin pressure continues with regard to Infosys.

The NIFTY IT index slipped as much as 2% to 36,211.85 levels during the day. Last seen, nine out of 10 constituents of the index were trading in the red.

Among individual names, Coforge was trading over 8% lower at ₹1,698.80, while Persistent Systems was down around 8% at ₹5,159.50. Infosys was trading over 1% lower at ₹1,556.20. TCS, HCLTech, Tech Mahindra, LTIMindtree, and Wipro were also trading with losses between 1 and 2%.

The fall in the IT pack was a little surprising as Infosys reported a good set of numbers for the just-concluded quarter. Even, according to news reports, Coforge and Persistent Systems fared better.

However, analysts tracking the sector note that the headwinds for the sector still persists and the outlook seems hazy.

Infosys Q1 FY26 results

The IT services major broke the trend of subdued and listless earnings of the IT sector; however, the stock was still in the red as the Street is looking for more cues for the IT sector outlook.

The company on Wednesday reported an 8.7% rise in its June quarter net profit and revised its full-year revenue forecast after stronger-than-expected earnings growth.

Consolidated net profit of ₹6,921 crore in April-June – the first quarter of the 2025-26 fiscal year – compared with ₹6,368 crore earnings in the same period a year back, according to a company statement.

The IT services company revised upwards its annual revenue growth forecast to the 1% to 3% band from a prior 0-3%.

Here, it must be noted that the company did not increase the upper band of the guidance. Hence, this could be attributed to the fall in shares.

Revenue from operations at ₹42,279 crore was 7.53% higher year-on-year (YoY) and 3.3% quarter-on-quarter, on the back of strong performance in AI and deal wins.

Net profit, however, fell 1.5% sequentially when compared with the January-March quarter.

Coforge Q1 FY26 results

The mid-tier IT services company reported a revenue of ₹3,689 crore in rupee terms. In US dollar terms, revenue came in at US$442 million.

The company said that the revenue was up 9.6% in US dollar terms, 8.2% in rupee terms, and 8% QoQ in constant currency (CC) terms, and the figure was up 54.5% in US dollar terms, 56.5% in rupee terms, and 51.5% YoY in CC terms.

EBITDA, or earnings before interest, taxes, depreciation, and amortisation, came in at $77.3 million, up 13.6% QoQ and 50.1% YoY in US terms.

EBITDA margin stood at 17.5%, up 61 bps QoQ.

Net profit or profit after tax (PAT) came in at ₹317 crore, up 21.5% on a QoQ basis and 138.4% on a YoY basis.

The company said that the board has recommended an interim dividend of ₹4 per share, and the record date for this payout will be July 31, 2025.

“The 9.6% sequential dollar growth in Q1, a next twelve-month signed order book which is 46% higher YoY, a very robust large deal pipeline and a pathway to 14% EBIT in FY’26 are all pointers to what we believe will be an exceptional fiscal 26," said Sudhir Singh, Chief Executive Officer and Executive Director, Coforge Ltd.

Persistent Systems also reported decent numbers.

According to news reports, the company's revenue in US dollar terms for the quarter stood at $389.7 million, which was in line with Street estimates. On a sequential basis, Persistent's revenue grew by 4%.

Revenue in rupee terms increased by 2.8% from the March quarter to ₹3,333.5 crore. Its operating profit, or EBIT (earnings before interest and tax), stood at ₹517.7 crore, up 2.5% from the previous quarter.

EBIT margins for the period narrowed by 10 basis points from March to 15.5% from 15.6%.

Persistent's revenue growth in constant currency terms for the quarter was 3.3%, per a news report.