Shares of Tata Consultancy Services (TCS) climbed by 5% in Friday's trading session following the release of its in-line September quarter results. This positive investor sentiment propelled the top five Indian IT firms by market capitalization – TCS, Infosys Ltd, HCL Technologies Ltd, Wipro Ltd, and Tech Mahindra Ltd – to collectively add a substantial ₹56,334 crore to their market value.
Major IT Firms See Significant Gains
TCS, India's largest IT company by revenue, saw its shares increase by 4.73% to ₹2,173.55 apiece, contributing ₹31,857.26 crore to its market cap, which reached ₹7,82,700 crore. Infosys also experienced a boost, adding ₹10,206 crore to its market capitalization as its stock rose by 2.23% to ₹1,016.80. HCL Technologies saw its shares climb 2.7% to ₹1,213.10, while Wipro added 2.65% to ₹162.80, and Tech Mahindra gained 1.76% to reach ₹1,522.
Strong Q2 Performance and AI Opportunities
Analysts highlighted TCS's healthy deal wins in Q2, totaling $9.6 billion, excluding significant contracts like Porsche and Best Buy. The company's annualised AI revenue has now reached an impressive $3.1 billion, accounting for over 10% of its total revenue. This figure signals increasing monetization of AI-led opportunities and a strategic shift towards leveraging artificial intelligence.
SBI Securities noted that TCS demonstrated steady growth in both revenue and profitability, even amidst a challenging macro demand environment. Opportunities are primarily emerging from vendor consolidation, enterprise system modernization, and the integration of AI solutions, according to the brokerage.
Analyst Insights on Market Dynamics
"TCS delivered a steady set of numbers for 2QFY27 despite headwinds and weaker North America. The company remains positive on the long-term growth outlook, driven by AI monetisation opportunities, a recovery in North America, strong BFSI and manufacturing technology spending, increasing AI-led transformation and large deal wins, rising technology intensity in GCCs/GBSs, expanding data centre and cloud adoption, and potential margin expansion from productivity gains and improved AI pricing," a domestic brokerage stated.
Choice International further added that AI-powered engineering and IT operations, alongside vendor consolidation strategies, are supporting market share gains in traditional services. However, they also pointed out that deflationary pricing pressure remains a key headwind for growth, balancing the near-term growth moderation and margin trajectory with healthy total contract value (TCV) and improved AI monetization.
H-1B Visa Concerns Downplayed
Investors largely shrugged off the US suspension of H-1B visa processing, with comments from NASSCOM and TCS suggesting that any potential impact would be limited. This indicates the market's confidence in the Indian IT sector's resilience and its ability to adapt to regulatory changes, focusing instead on strong quarterly performances and strategic growth areas like AI.