Mphasis, Persistent Systems, Infosys power IT rally; NIFTY IT index jumps over 3.5%

IT stocks stole the limelight in early trade on Thursday, July 2, as the beaten-down sector witnessed strong buying interest. The NIFTY IT index, down nearly 30% so far in 2026, rallied sharply with gains across the board.

The NIFTY IT index rallied as much as 3.64% to hit the day's high of 26,709.65 levels, with all ten constituents trading in the green.

The NIFTY IT index tracks the performance of the country's leading information technology companies listed on the National Stock Exchange (NSE). It comprises 10 major IT stocks, including industry heavyweights such as Infosys, Tata Consultancy Services, HCL Technologies, Wipro, and Tech Mahindra.

The index serves as a key benchmark for India's IT sector and is closely tracked by investors to gauge trends in technology spending, global demand, digital transformation, and the earnings outlook for software exporters.

Stocks' performance

When last seen, Infosys shares were trading 4.39% higher at ₹1,028.60 apiece on the NSE, while Tech Mahindra was up 2.28% at ₹1,393.30. HCL Technologies shares were trading at ₹1,072, up 3.66%, and Wipro Ltd was up 0.86% on the NSE.

Persistent Systems shares were up 3.71% at ₹4,491 apiece on the NSE, and Coforge Ltd was up 4.54% at ₹1,432.90 on the NSE. Mphasis Ltd shares were trading 4.55% higher at ₹2,223.50 apiece on the NSE.

What Nandan Nilekani said on AI

At Infosys' 45th Annual General Meeting (AGM) in late June 2026, Chairman and co-founder Nandan Nilekani said artificial intelligence (AI) would not replace IT services companies but would instead "amplify" them. He said Infosys is targeting a $400 billion AI-first services opportunity by 2030, while addressing what he described as the "existential question" facing the IT industry amid rapid technological change.

"More than three years after GenAI was launched, Infosys is more relevant than ever before and well positioned for the decade ahead. While we embrace the best coding tools and improve our productivity, there is much more to do in the software development life cycle," Nilekani said.

Highlighting the opportunity for IT services firms, he added, "The AI deployment gap in large enterprise clients is real, and closing that gap is where the work is. AI will not replace companies like ours. It will amplify those who move with purpose and adapt with speed."

Indian IT sector outlook

The outlook for India's IT services sector remains cautious heading into the June quarter (Q1 FY27) earnings season, with analysts expecting macroeconomic uncertainty, slower discretionary spending, AI-led disruption, and geopolitical risks to continue weighing on client decision-making. While demand for AI-related projects remains healthy, it has not yet been sufficient to offset the weakness in traditional IT spending, resulting in slower deal conversions and elongated decision cycles across key overseas markets.

Against this backdrop, analysts expect most large-cap IT companies to report muted sequential growth for the June quarter and maintain a cautious outlook for the rest of FY27. Some analysts also believe companies such as Infosys and HCL Technologies could trim the upper end of their FY27 revenue growth guidance, reflecting a slower-than-expected recovery in technology spending.

Mid-cap IT firms, however, are expected to fare relatively better, supported by the ramp-up of large deal wins and a stronger execution pipeline.