On Tuesday, October 13, Indian IT services stocks posted strong gains, driven largely by HCLTech’s 7.85% rise to ₹1,319 on the NSE. The NIFTY IT index surged 4.83% to 29,719.05, with all ten constituents trading higher. HCLTech’s lift followed its Q2 FY27 results, which showed resilient services growth, robust margins, and AI revenue momentum, while also noting a recovery in deal bookings. The rally reflected cautious optimism among investors after the company’s broadly in‑line earnings announcement.

TCS also climbed 6.15% to ₹2,255.70, after reporting Q2 FY27 results that were slightly ahead of market expectations. Infosys joined the rally, rising 3.52% to ₹1,055.90, and Persistent Systems and Tech Mahindra added 3.60% and 4.32% respectively. The collective performance underscored a sector‑wide confidence boost, as analysts noted that both HCLTech and TCS had demonstrated service‑sector resilience despite concerns over organic growth and premium valuations.

Analysts’ views on HCLTech were mixed. Nomura remained positive, raising earnings estimates, while HSBC and CLSA stayed neutral. JPMorgan and Citi expressed caution regarding growth and valuations, and Kotak Securities highlighted a margin surprise but flagged weakness in the products business. The divergent outlooks underscored the complexity of assessing the company’s long‑term trajectory amid a recovering deal‑booking environment.

AI revenue momentum emerged as a key factor for investor comfort. HCLTech’s AI business showed strong momentum, and TCS reported an expanding AI revenue pipeline. This trend suggests that continued investments in AI services could support future growth for IT firms, as clients increasingly rely on external partners to implement AI solutions. The sector’s ability to convert AI demand into revenue remains a focal point for market participants.

Deal bookings and demand resilience were highlighted by analysts, noting healthy deal wins and improving booking momentum. These indicators imply that clients are still willing to spend on technology services, even as some remain cautious about discretionary projects. The positive booking trend could enhance revenue visibility for the coming quarters, reinforcing investor confidence in the sector’s resilience.

External factors such as global tech concerns also influenced sentiment. US technology stocks faced pressure after reports of OpenAI’s annualised revenue falling short of expectations, prompting investors to differentiate between AI infrastructure firms and IT services companies. Broadcom CEO Hock Tan warned that access to capital could become a major constraint on the AI boom, potentially overtaking shortages of semiconductors and memory chips. These developments underscore the importance of client spending and financing infrastructure for Indian IT services firms.