Large-cap IT stocks rallied on Monday, buoyed by a confluence of clearer AI revenue visibility, improving signals from the US demand environment, and expectations of incremental foreign inflows as currency pressures eased, analysts and experts said. The combination helped lift the sentiment around major technology exporters after an extended phase of cautious positioning.
Wipro led the gains among IT counters, closing up 3.1% after touching an intraday high of Rs 273.15. Infosys ended the session 3.05% higher at Rs 1,689.70 while Tech Mahindra gained 2.09% to close at Rs 1,646.55. HCLTech rose 1.67% to close at Rs 1,670.00 and Tata Consultancy Services (TCS) closed 1.28% higher at Rs 3,324.65, reflecting a broad-based buying interest across frontline IT names.
What’s the trigger for the rally?
A key trigger for the rally was fresh disclosure around artificial intelligence-led revenues by global and domestic IT bellwethers, experts said. Accenture’s latest quarterly results offered one of the clearest data points yet on how enterprise AI spending is translating into revenue.
Accenture reported consolidated revenue of $18.7 billion for the September–November quarter, alongside advanced AI new bookings of $2.2 billion.
Since Accenture follows a September–November fiscal quarter as its first quarter, numbers are widely viewed as an early indicator of demand trends that Indian IT companies could see in the October–December period. The disclosures reinforced expectations that AI-led deal pipelines are beginning to move beyond pilot projects into measurable revenue streams.
TCS adds positive sentiment
TCS added to the positive sentiment after the firm, for the first time, shared detailed AI-related revenue metrics and data points during its recent analyst day presentation last week – the move to formally quantify AI revenues was seen by the market as a signal of growing maturity and monetisation of these offerings.
Disclosures show that TCS now reports annualised AI services revenue of about $1.5 billion, with the management highlighting a strong sequential momentum. The company said this figure includes engagements where AI forms the core of the service scope and commercial construct, rather than being a peripheral productivity layer embedded in traditional contracts.
“Investors could view this as reducing uncertainty around how quickly AI investments can translate into top line contribution for large-cap IT companies,” an IT analyst said.
The sector was also supported by a more constructive macro backdrop in its largest market. The sentiment around the US demand environment improved following the latest round of interest rate cut, raising expectations of a gradual revival in discretionary technology spending by global clients.
At a broader market level, expectations of renewed foreign institutional investor interest also played a role, aided by the recent stability in the rupee.
“The market expects more FII investments now, with the rupee gaining against the dollar after breaching Rs 91 (to a dollar). Since they have a better understanding of the demand environment in the US and North American markets, which are core markets for large-cap Indian IT companies, they prefer to invest in these firms,” Pareekh Jain, founder and chief executive of tech advisory EIIRTrend, said.
However, he cautioned that the tide may turn if the rupee once again starts to depreciate.
