TCS, Infosys, HCLTech: IT stocks reel under pressure with NIFTY IT tumbling 21% in 1 month; what you need to know on Tuesday, Feb 24

The Indian IT stocks, mirroring the fall on Wall Street, have been battered after persistent selling by the market participants.

Data show that the Nifty IT index has plunged nearly 21% over the past month (as of Tuesday, February 24 early trade level), underscoring the sharp correction in Indian IT stocks and how the sector has fallen out of favour with investors.

How IT stocks are faring on Tuesday, February 24

Shares of IT services companies were trading with notable losses in the early trade on Tuesday. The NIFTY IT index was trading 3.14% lower at 30,559.15 levels, with all 10 constituents trading in the red. The biggest loser was Coforge (down 4%). Next on the losers' list were Persistent Systems (down 3.75%), HCLTech (down 3.6%), and Mphasis (down 3.5%).

US stocks on Monday, Feb 23

US equities tumbled in the overnight trade on Monday, February 23, as investors grappled with persistent fears around artificial intelligence disruptions to various industries. Besides, President Donald Trump’s decision to raise his global tariffs also weighed on the sentiment.

The Dow Jones Industrial Average dropped 821.91 points, or 1.66%, to close at 48,804.06, while the Nasdaq Composite declined 1.13% and ended at 22,627.27. The S&P 500 shed 1.04% and closed at 6,837.75, putting it into the red once again for 2026.

The 30-stock Dow was dragged down by IBM shares, which declined 13%.

IBM shares plunged after Anthropic unveiled new programming capabilities for its Claude Code product. Other software majors, including Microsoft and CrowdStrike, also remained under pressure amid lingering concerns over AI-driven disruption. Microsoft fell 3%, while CrowdStrike tumbled nearly 10%.

What analysts say on Indian IT sector

In its recent note, Jefferies said that AI may structurally change the IT business mix towards consulting/implementation while shrinking managed services. This would not only increase cyclicality but also require a change in talent/operating model – thus adding risks.

The global financial services giant said that despite their 16% fall YTD, stocks still offer higher downside than upside.

Takeaways from AI Summit 2026

In the recently concluded India AI Impact Summit 2026, industry leaders deliberated on the impact of artificial intelligence on SaaS and enterprise services and how the technology could reshape the nature of the IT industry.

The panellists indicated a collective message: AI agents will reshape business and operating models, but they will not render them obsolete overnight.

They emphasised that success in the AI era will hinge on agility, enterprise readiness, orchestration, and above all, the ability to continuously solve real customer problems in increasingly complex digital ecosystems, according to an official release.

Addressing concerns over sharp market reactions to AI tools, including speculation around the future of SaaS, Arundhati Bhattacharya, Chairperson & CEO of Salesforce India, cautioned against oversimplification.

Software-as-a-Service (SaaS) is a cloud-based model in which applications are delivered over the internet for a subscription, rather than installed and maintained on legacy computers or servers at client premises. "Markets will say a lot of things, and not all of it comes true," she noted.

"When you talk about the SaaS model, it's not only about vibe coding or creating an application; it's about understanding workflows, recognising customer pain points, and ensuring you address them. It's about observability, governance, auditability, and adoption," she said.

What the TCS CEO said

From a services perspective, K Krithivasan, Chief Executive Officer of Tata Consultancy Services, India's largest IT services company, emphasised a fundamental shift in the role of engineers.

"We are entering an era where the role of the software engineer is shifting toward high-level architecture and rigorous validation," he said. While AI promises immense productivity gains, enterprise adoption requires significant groundwork, from data rationalisation to application modernisation, he stressed.

Instead of contraction, he said he foresees expansion of the market and its many opportunities. "We don't envision a shrinking of the sector, but rather a massive explosion in the volume of what can be produced and the complexity of the problems we can solve."

Enterprise AI adoption demands more than generic models, said HCLTech CEO

C Vijayakumar, Chief Executive Officer and Managing Director of HCL Technologies, asserted that enterprise AI adoption demands more than generic models.

"Large language models and foundational models cannot yet be applied most efficiently to enterprise use cases," he said, noting a persistent gap between foundational capabilities and enterprise-grade performance.

HCL Technologies is building intellectual property and specialised services, including physical AI and agentic AI, to bridge that gap and scale adoption, even if that means proactively evolving existing business lines.

Infosys sees opportunity ahead

Infosys Chief Executive Officer Salil Parekh underscored the scale of opportunity ahead.

"AI is creating a $300 billion services opportunity by making the 'impossible' economically viable."

The panel discussion came against the backdrop of the market's growing unease over SaaS firms' model as AI agents threaten to automate core workflows, cut dependence on traditional software subscriptions, and pressurise margins.

The shift toward outcome-based AI solutions has raised concerns about pricing pressure and disruption from AI-native competitors and tools.