TCS and HCL Tech lead Indian IT stock rally despite global tech rout

Indian information technology shares rallied sharply on Tuesday morning, adding more than Rs 26,000 crore in market capitalisation within minutes of the opening bell and completely decoupling Dalal Street from a steep global technology rout.

The sector-wide surge was led by HCL Tech and Tata Consultancy Services (TCS), propelling the Nifty IT index up by more than 3% to reach 29,235.25. The rally spread across the broader market, lifting the benchmark BSE Sensex by 466.15 points to 72,390.83 and the Nifty 50 by 145.30 points to 22,508.65.

How major IT stocks performed

Tuesday's sharp turnaround followed solid earnings disclosures and robust deal bookings from domestic heavyweights, drawing value buyers back to shares that had dropped 23% over the past year.

Strong operational delivery at HCL Tech

HCL Tech served as the primary catalyst after posting a 21% year-on-year rise in consolidated net profit for the second quarter, reaching Rs 5,132 crore. Revenue from operations climbed 12% to Rs 35,620 crore, while new deal wins totalled $3.26 billion for the quarter.

The firm retained its operating margin guidance of 17.5% to 18.5%, supported by advanced artificial intelligence contracts and operational efficiencies. Following the earnings release, Nomura raised its price target for HCL Tech to Rs 1,330, lifting its margin outlook by 50 basis points to 18%.

TCS, India's largest software exporter, provided additional momentum with a 5% jump, extending gains from the previous week after reporting a 15% increase in quarterly net profit.

"The quarterly numbers reported by Accenture, TCS, and HCLTech indicate that the worst of earnings growth concerns for IT companies might be behind us," said Dharmesh Kant, head of equity research at Cholamandalam Securities. "This is triggering a value buying opportunity in the sector."

Resilience against global headwinds

The domestic rally stood in stark contrast to turmoil across international markets. Elsewhere in Asia, South Korea's Kospi plunged 6%—forcing a temporary trading halt—while Japan's Nikkei fell 2.6% and MSCI's index of Asia-Pacific shares outside Japan dropped 2.4%.

Global investors dumped technology assets after Broadcom chief executive Hock Tan and Intel head Lip-Bu Tan cautioned that rising capital costs could constrain artificial intelligence infrastructure. Disclosures that OpenAI's annualised revenue run-rate stood near $50 billion rather than earlier indications approaching $70 billion added to the international sell-off.

India's market held firm against that pressure. Investor confidence was helped by rupee stability, with the domestic currency strengthening to 95.25 against the US dollar following proactive liquidity steps by the Reserve Bank of India, even as markets monitor retail inflation at 5.54% and Brent crude trading above $100 per barrel.