Information technology (IT) stocks took a sharp hit on Friday as investors reacted to global uncertainty following former US President Donald Trump's latest tariff announcement. While the Sensex and Nifty both dropped over 1%, the NIFTY IT index plunged 3%, reaching a 10-month low of 33,663.55.
All major IT stocks declined amid fears of a US recession, which triggered heavy selling. Indian IT firms earn a significant share of their revenue from the US, and concerns over reduced technology spending further eroded investor sentiment.
Top companies like Tata Consultancy Services (TCS), Infosys, HCL Technologies, Wipro, and Tech Mahindra fell between 2.4% and 3.3% during Friday's session.
So far this year, the NIFTY IT index has dropped by 22.3%, sharply underperforming the broader Nifty 50 index, which is down just 3% in the same period.
Why Are IT Stocks Falling?
Multiple factors are driving the downturn in IT stocks:
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Trump’s tariff policy: The announcement of new US tariffs has spooked global markets. Indian IT companies, which rely heavily on US clients, are seen as vulnerable to a slowdown in American economic activity.
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Recession fears in the US: A potential US recession could prompt American businesses to reduce IT spending, directly affecting contract volumes for Indian firms.
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Weak demand: Analysts point to a broader slowdown in technology spending. Discretionary IT budgets are being slashed, which impacts growth prospects.
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Brokerage downgrades: ICICI Securities downgraded several IT firms, citing slow recovery in tech spending. TCS was downgraded from "buy" to "add", Infosys from "buy" to "hold", HCL Technologies from "hold" to "reduce", and Tech Mahindra from "add" to "reduce".
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Cautious global outlook: JP Morgan has advised against buying IT stocks now, warning that FY26 guidance may remain conservative, leading to more selling pressure.
Brokerage Expectations for Q4 FY25
HDFC Securities has shared its Q4 FY25 earnings preview for key IT players, expecting muted performance due to weak demand and fewer billing days.
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Revenue outlook: Large IT firms may report a quarter-on-quarter (QoQ) revenue change between -1.8% and +0.1%.
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Infosys is expected to see the sharpest decline at -1.8% QoQ.
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TCS, HCL Tech, Wipro, and Tech Mahindra may see ~0.5% revenue decline QoQ.
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Mid-tier players like L&T Technology Services may grow 13.7% QoQ due to seasonal strength and acquisitions.
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Persistent Systems could see 3.7% growth, while Tata Elxsi, Birlasoft, and Sonata Software may underperform.
FY26 Outlook for IT Firms
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Infosys is expected to guide for 2–4% revenue growth.
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HCL Technologies may project 3–5% growth.
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Wipro is likely to give conservative Q1FY26 guidance of -1% to +1.5% growth.
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L&T Technology Services could forecast 10%+ growth, boosted by acquisitions.
Margins are likely to remain steady or see minor improvements due to favorable currency movements and easing supply constraints:
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TCS: 26%–28%
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Infosys: 20%–22%
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HCL Technologies: 18%–19%
Deal momentum remains weak. TCS is expected to report ~$11 billion in new deal total contract value (TCV), but no mega deals have been announced recently.
RIL Shares Fall Amid Global Uncertainty; Ambani’s Net Worth Takes a Hit
Shares of Reliance Industries Ltd (RIL) fell nearly 4% on Friday, tracking broader market declines following Trump’s tariff policy announcement. The stock opened at ₹1,240 and slid to an intraday low of ₹1,192.85—close to its 52-week low of ₹1,156 recorded on March 3, 2025.
RIL has declined 6.35% over the last five trading sessions. In the past six months, the stock is down 13.46%, and over the last 12 months, it has lost 17.98%.
As RIL shares slumped, Mukesh Ambani’s net worth also saw a sharp fall. According to the 2025 Forbes Billionaires List, Ambani dropped out of the global top 10. His net worth fell from $116 billion to $92.5 billion, placing him 18th worldwide, even as other billionaires saw wealth gains.
Brokerages Share Their Outlook on RIL
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Goldman Sachs has retained a “Buy” rating on RIL, expecting stable Q4 core earnings. It forecasts 6.5% YoY growth in the retail segment (excluding telecom) and 4% QoQ growth in Jio revenue. For FY26, Goldman expects 18% earnings growth, with retail and Jio acting as key growth engines, along with updates on RIL’s new energy projects.
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Macquarie has turned bullish, raising its RIL price target to ₹1,500. It expects 15–16% CAGR earnings growth between FY25–FY27, driven by retail, telecom, and energy. The brokerage values RIL using a sum-of-the-parts (SOTP) model, factoring in potential spin-offs.
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JPMorgan, meanwhile, is bullish on RIL’s global bonds, upgrading the 2032 and 2045 bonds to “Overweight”. The firm sees RIL’s diversified business model, strong balance sheet, and high liquidity as positives. It also believes legal issues, like the gas pricing dispute, won’t significantly impact RIL’s long-term financial stability. Any bond price correction could offer value buying opportunities.
