Infosys, TCS, Wipro: NIFTY IT index rises 3% on February 17 amid India AI Summit; check what Nandan Nilekani said on Infy AI Investor Day

The top gainer on the IT index was Infosys (up over 3%), followed by Coforge, Persistent Systems, and HCL Technologies.

The IT stocks are in focus amid the India AI Impact Summit 2026 that began on Monday, February 16, and will conclude on Friday, February 20.

What tech leaders are saying

Software developers are the invisible architects of the AI age, and India stands at the centre of this all, OpenUK CEO Amanda Brock said.

"Everybody goes to a pizza restaurant and talks about the toppings. They don’t talk about the base because the base is standard. But when you take that base away, what you’ve got is a sloppy mess," she said in an interview with news agency PTI.

The toppings are the flashy AI and technology products. The base is the open source, which is the shared code, data sets, tools, and infrastructure that developers around the world build together.

The technology powers cloud platforms, mobile apps, cybersecurity tools, and increasingly artificial intelligence systems. It is rarely glamorous, but without it, the digital economy would wobble. And this base, to a large extent, is built collaboratively, she explained.

What Nandan Nilekani said

Meanwhile, Infosys co-founder and chairman Nandan Nilekani, at Infosys’ Investor Day on February 17, said that writing code will no longer be the objective for software technology professionals as artificial intelligence (AI) fundamentally changes how software is built and deployed, flagging a major talent and operating model transition for the IT industry.

Unlike earlier transitions, such as mobile or cloud, where enterprises could add a front end or lift and shift applications, AI requires rethinking customer journeys, business processes, and organisational structures.

“This is a huge challenge for talent,” Nilekani said, according to a Moneycontrol report, adding that “Talent will have to deal with the world where writing code will not be the goal, it will be actually making AI work. So, the jobs will change and operating model (too).”

What leading analysts say on AI concerns

UBS, in a recent note, highlighted that Indian IT services stocks have witnessed a sharp sell-off, with the NIFTY IT declining around 13% over the past two weeks. The correction comes as investor concerns over long-term terminal value assumptions have moved to the forefront following developments involving Anthropic and Palantir Technologies.

According to the global investment bank and financial services company, the market reaction has been driven by fears that rapid advances in agentic AI could structurally disrupt the traditional IT services model, which has historically relied heavily on staff augmentation.

UBS noted that current valuations indicate investors are now pricing in terminal free cash flow (FCF) growth of 4–6%, compared with 6–7% just a month ago. FCF yields are estimated at around 6%, approaching levels seen during earlier stress periods such as the cloud slowdown and the COVID downturn, reflecting rising scepticism.

Terminal growth rate (TGR) refers to the assumed constant rate at which a company’s free cash flows are expected to grow indefinitely beyond the explicit forecast period in a valuation model.

It is primarily used in the discounted cash flow (DCF) method to estimate terminal value, which often constitutes a significant portion of total valuation.

UBS believes that a structural evolution in the business model is both necessary and likely in response to these shifts.

Citigroup (Citi)

Analysts at Citigroup note that concerns surrounding AI, along with a potential lightening of positions by domestic institutional investors (DIIs), could lead to some compression in valuation gaps across Indian IT stocks.

While higher volumes are likely going ahead, the key debate remains how much of the incremental work will be executed by machines versus humans, and where value capture will ultimately reside.

Citi maintains a cautious stance on Indian IT services, citing an uncertain spending environment and rapid technological changes. The brokerage also flagged high competitive intensity and market fragmentation, faster growth of Global Capability Centres (GCCs), and the evolving impact of AI as key overhangs.

Within its large-cap coverage, Citi relatively prefers Infosys and HCL Technologies.

Nomura on IT Services

Issue #1: Will Indian IT businesses fade in an AI-driven world?

Nomura outlines three key concerns currently weighing on investor sentiment:

1. The "anthropic shock” and fears of disruption in the Application Development and Maintenance (ADM) market following developments at Anthropic.

2. If SaaS companies themselves face disruption from AI, why would their implementation partners remain insulated?

3. The likelihood of margin compression in an AI-led environment.

However, Nomura argues that these concerns may be oversimplifying the role of IT services companies in an evolving technology landscape.

Issue #2: What is fair valuation across scenarios?

Nomura lays out three potential scenarios:

Scenario 1: Structural decline (current market fear)

Revenue growth moderates to around 2–3% in the best case or even declines in a worst-case scenario. This assumes routine tasks become highly automated, revenue deflation of 6–7% (or more) persists for the foreseeable future, and IT firms fail to replace lost business with higher-value work.

Under this scenario, with negligible earnings growth, valuation multiples could fall to 10–12x.

Scenario 2: Data/AI-led pivot

If IT companies successfully pivot toward data and AI-led services, revenue growth could gradually revert to long-term averages.

In this case, price-to-earnings (P/E) multiples may settle in the early 20s range.

Scenario 3: AI Orchestrators

In a more transformative outcome, IT firms evolve into AI orchestrators—shifting from selling effort-based services to delivering value and outcome-based solutions.

This model could introduce non-linearity in revenues and margins, potentially pushing P/E multiples above the early-20s range.

Valuations

Nomura notes that valuations have corrected meaningfully and are now trading below the last 12-year averages and at a 12–39% discount to five-year averages.