Infosys, TCS, Coforge: NIFTY IT jumps 4%; what is driving investors to the beaten-down sector?

Indian IT services stocks are back in focus, staging a strong comeback after a prolonged sell-off earlier this year. The sector, which was among the worst performers in the first half of 2026 amid concerns over discretionary spending and global macro uncertainty, has witnessed a sharp rebound over the past month.

The NIFTY IT index has surged more than 13% in the last 30 days. On Tuesday, July 28, the index climbed as much as 3.85%, with all 10 constituent stocks trading in the green, extending its recent winning streak.

Coforge posts stellar Q1 numbers

Experts note the 13% surge in Nifty IT over thirty days, including today's nearly 4% jump, deserves a more nuanced reading than either celebration or dismissal.

Dasani added that TCS rising 3.3% to ₹2,371 as the top Nifty gainer shows the move has broadened beyond the mid-caps.

The honest framework, though, separates what has been proven from what has been priced.

“What is proven is that select mid-cap IT names with strong deal books can still beat, which validates the mid-cap-over-large-cap preference that has been the only constructive position worth holding in this sector,” the expert added.

Other key triggers: Better-than-feared Q1 earnings and outlook

The June-quarter earnings season has eased concerns that the slowdown in discretionary tech spending would worsen.

Several large and mid-cap IT companies have reported resilient deal wins, stable or improving margins, and maintained an optimistic outlook on AI-led demand. Investors are increasingly pricing in the possibility that FY27 earnings estimates could see upgrades.

Beyond the large-cap universe, companies such as Coforge, Mphasis, and Happiest Minds have reported impressive numbers for the quarter gone by and shared encouraging outlooks for the coming quarters.

What lies ahead after 13% surge in IT stocks?

Analysts tracking the sector note that the NIFTY IT index has rallied 13% over the past month, its strongest monthly performance in two years, and the market appears to be pricing in much more than what has materialised so far.

Investors are betting on a broad-based recovery in technology spending, a favourable outcome from the US Federal Reserve's policy decision on Wednesday, and encouraging commentary on AI-related capital expenditure from major US technology companies due to report earnings this week. However, none of these catalysts has been confirmed yet.

The structural challenges facing large-cap Indian IT companies also remain largely unchanged. Concerns raised by Accenture's guidance cut, KPIT Technologies' earnings warning, and IBM's disappointing update continue to weigh on the sector.

While strong quarterly performance from a mid-cap IT company is encouraging, it is not sufficient to signal a broad-based recovery in the industry's growth outlook, experts say.

What investors need to know

Dasani notes that the stance on large-cap IT stays cautious. Mid-cap names with reported deal-book strength have earned selective attention.

"Chasing the aggregate index after its sharpest month in two years, two days before the Fed and with the large-cap prints still ahead, is paying in advance for evidence that has not arrived," Dasani added.

IT stocks: A quick look

At the time of writing this report, the NIFTY IT index was trading 3.84% higher at 30,573.10 levels, with all 10 components in the green.

Coforge led the pack with 10% rally, followed by Infosys and TCS.