Infosys, TCS, Tech Mahindra lead IT rally; here is what's driving the rebound

Most IT stocks traded in positive territory on Friday, July 17, with the NIFTY IT index rising over 2%, as in-line June quarter (Q1 FY27) earnings from Tata Consultancy Services (TCS) and HCL Technologies, along with an encouraging performance by Tech Mahindra, boosted sentiment.

Constructive management commentary, coupled with a string of large deal wins by leading IT firms, also lifted sentiment. In addition, short covering, easing concerns over discretionary technology spending, and expectations that demand may have bottomed out further supported the rally.

How stocks and the IT index are faring

When last seen, the NIFTY IT index was trading 0.86% higher at 28,970.55 levels. The index hit a high of 29,380.75 against the previous close of 28,722.60, rising 2.29% intraday so far.

Among individual names, Tech Mahindra was up nearly 1.5% at ₹1,532.50 while Infosys traded 1.59% higher at ₹1,099.60. HCL Technologies was trading 1.48% higher at ₹1,205, and Tata Consultancy Services (TCS) shares were up 1.22% at ₹2,227.90 apiece on the NSE.

Wipro, on the other hand, was down 1.54% at ₹175 on the NSE after weak Q1 numbers.

Tech Mahindra's good Q1 numbers

Tech Mahindra on Thursday reported a 28.4% rise in consolidated net profit for the June quarter (Q1 FY27) at ₹1,465 crore, and expressed confidence about the demand environment.

India's fifth-largest IT services firm said growth in the June quarter was broad-based, led by manufacturing and financial services, with strong momentum also in healthcare and retail. Tech Mahindra management expressed confidence about a "sustained" performance through the rest of the year, provided the macroeconomic situation does not change dramatically.

The company said its strong order book, long-standing client relationships and robust first-quarter performance give it confidence in sustaining growth through the remainder of the year and outperforming the peer average.

HCLTech signs 7-year agreement with The Guardian Life Insurance Company of America

HCLTech on Thursday announced a new seven-year agreement with The Guardian Life Insurance Company of America® (Guardian), one of the largest mutual companies in the US and a leading provider of insurance, retirement, wealth management and employee benefits solutions.

"The new agreement builds on the companies’ previously announced partnership and expands their collaboration to advance Guardian’s AI-powered modernization across technology and operations to support long-term business growth," the company said.

Additionally, HCLTech will accelerate technology and talent transformation across data, applications and engineering while also driving operational excellence across group benefits, individual protection, retirement and wealth management, resulting in reduced costs, faster time to market and continued delivery of high-quality experiences for customers, advisors and distribution partners.

Big deal wins by TCS

• On July 13, TCS announced an expanded collaboration with ABB, a global technology leader in electrification and automation, to transform its global network operations. The engagement marks the next phase of a trusted 20-year partnership. As part of this multi-million, multi-year deal, TCS will scale its role from managing infrastructure and applications to delivering end-to-end global network operations, through an integrated network-as-a-service model.

TCS will help ABB improve user experience, enhance operational efficiency, strengthen security and compliance, scale service delivery, and prepare for next-generation digital operations.

• On July 14, The New Terminal One at John F. Kennedy International Airport (JFK) entered into a strategic partnership with Tata Consultancy Services (TCS) to shape one of the world’s leading airport experiences.

As the strategic technology and innovation partner to the New Terminal One, TCS will support the delivery of an intelligent, digitally-enabled guest experience at the new terminal, delivering cost efficiencies to airlines and transforming international travel at JFK, the largest global gateway to the United States.

• On July 15, TCS announced the launch of the TCS Autonomous Engineering Lab Powered by NVIDIA at its Global Axis campus in Bengaluru. The new facility will serve as a physical AI hub to accelerate the development and real-world deployment of AI-led solutions across mobility and manufacturing using NVIDIA AI Infrastructure.

• On July 16, TCS said it has launched the Consumer Business Group (CBG) Gemini Experience Center (GEC) in Kolkata, India.

The centre will showcase AI-led innovations tailored for consumer business needs and built with Google Cloud and Google’s Gemini models.

With the launch of the CBG GEC in Kolkata, TCS now operates three Gemini Experience Centers in India. These include the Retail GEC at the Chennai Retail Innovation Lab and the BFSI GEC at the Bengaluru BFSI Innovation Lab, each designed to serve industry-specific innovation and transformation needs.

By the end of 2026, TCS plans to establish a total of 10 GECs globally, including four in India. This expansion further strengthens TCS’ global innovation footprint and underscores its strategic focus on partnering with hyperscalers to help enterprises navigate the next phase of AI-enabled transformation.

Other factors

The rally, as per analysts, was supported by short covering after the sharp correction in IT stocks over the past few months.

Short covering happens when traders who had bet that IT stocks would fall (by taking short positions) start buying those stocks back to close their positions. If the stocks rise instead of falling—often after better-than-expected earnings or positive management commentary—these traders rush to buy back shares to limit their losses. This buying adds to demand and can push stock prices higher, amplifying the rally.

Investors also appeared to favour companies with healthy deal pipelines, strong execution and resilient earnings, while remaining cautious on firms facing weaker growth and demand challenges.