India IT Stocks Rally Second Straight Day as TCS, Infosys, Coforge Surge Up to 5% on Q1 Earnings

The Quick Take

• TCS, Infosys, Coforge, and other Indian IT stocks gained up to 5% for a second consecutive session as strong Q1 FY27 earnings and AI-driven deal optimism drove buying
• Jefferies turned neutral on the Indian IT sector, citing positive FPI feedback and tactical upside potential following a sharp valuation correction
• The rally defied a global technology selloff linked to SK Hynix earnings disappointment, highlighting India IT's domestically-anchored earnings resilience

Indian IT stocks extended their run for a second straight trading day on Wednesday, with TCS, Infosys, Coforge, and other sector names each gaining up to 5% amid broad-based investor enthusiasm for the sector's earnings trajectory. The advance came in stark contrast to a global technology selloff triggered by SK Hynix's disappointing earnings results in South Korea, underscoring that India-specific earnings momentum is providing meaningful insulation from external headwinds. The sector's strong Q1 FY27 reporting cycle has featured robust AI-led deal wins, revenue beat rates above historical norms, and margin resilience that has surprised to the upside.

Institutional sentiment toward Indian IT has been improving notably, with Jefferies shifting to a neutral stance on the sector while flagging positive feedback from foreign portfolio investors who have returned to buying after an extended period of net outflows. The brokerage noted potential for tactical upside following a sharp correction in technology valuations over the preceding months. FPI positioning data for Indian IT stocks has been a closely watched leading indicator, and a shift toward net inflows suggests that global investors are willing to distinguish between India's strong company-level earnings backdrop and broader concerns about global AI spending sustainability.

Market participants are monitoring the upcoming U.S. Federal Reserve policy decision as a key external variable, with a small but notable minority at Citadel Securities and UBS raising the possibility of a surprise rate hike that could generate short-term volatility in emerging market equities. However, Indian IT companies have been benefiting from a structural pipeline of AI-led enterprise transformation contracts from North American and European clients, and the multi-quarter earnings visibility this provides gives analysts confidence in maintaining constructive sector views even through periods of global macro uncertainty.

Synthesized from 2 sources.