Indian IT stocks drop; analysts flag weak discretionary demand, AI pressures

Tech Mahindra

22/09/2026 07:52

** Indian IT stocks .NIFTYIT drop 1.3%
** Top sectoral loser with benchmark Nifty 50 .NSEI, which is down 0.2%
** CLSA, Goldman Sachs flag subdued near-term demand, challenging FY27 outlook
** Weak macro conditions, higher rates and inflation continue to weigh on discretionary spending, posing downside risk to earnings, especially for Infosys INFY.NS and Wipro WIPR.NS  - CLSA
** Says, management commentary remains cautious, though HCLTech's HCLT.NS demand trends appear the most resilient among large-cap peers
** Goldman Sachs also flags pressure on pricing due to AI-led productivity, in turn pressuring revenue  
** Both brokerages say AI creates new revenue opportunities, but timing remains uncertain, while near-term sector catalysts are scarce and global capability centres keep gaining share
** IT stocks remain worst YTD performer among major sectors, down ~25%, vs Nifty's ~11% drop


 (Reporting by Kashish Tandon in Bengaluru)
 ((Kashish.tandon@thomsonreuters.com))