Indian IT Stocks Extend Weakness As $115 Billion Selloff Deepens

India’s information technology stocks remain under pressure after nearly $115 billion was wiped off the sector’s value over four months, reflecting weak earnings outlook and demand uncertainty, according to Bloomberg.

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The decline has intensified since early April 2026, when Tata Consultancy Services kicked off the earnings season. The NSE Nifty IT Index has fallen about 25% in 2026 so far, making it the worst-performing sectoral index in India. The index also dropped more than 5% in the previous session to its lowest level since June 2023.

Earnings Misses and Weak Guidance Weigh On Stocks

Recent earnings announcements have reinforced concerns about slowing growth. Infosys Ltd., India’s second-largest IT services exporter, issued a revenue growth forecast below analyst estimates, according to Bloomberg. HCL Technologies Ltd. also reported a profit miss earlier, triggering multiple analyst downgrades.

As a result of these changes, both shares fell, making contributions to the general underperformance within the sector. The cautious forecast is due to persistent challenges for global discretionary technology spending.

Global Challenges And Impact Of Artificial Intelligence

The industry is dealing with two major challenges – weak global macroeconomic trends and fast-changing technology. Geopolitical events like the ongoing Iran crisis have impacted the global business environment, which in turn has affected the decisions regarding IT spending, according to Bloomberg.

Moreover, the use of AI technology has made changes in the patterns of demand. Businesses have adapted to this change by incorporating AI technology in their offerings and distribution channels. For example, Infosys has adopted AI in its services, while Tata Consultancy Services has collaborated with OpenAI to build AI-specific infrastructure, according to Bloomberg.

Valuation Trend and Market Impacts

The fall in the IT industry has impacted other markets as well. The technology segment contributes roughly 10% weightage to the NSE Nifty 50 index, making it an essential factor for the market's performance.

Valuations have normalized considerably. The IT index is currently trading at less than 17 times one-year forward earnings, compared to around 30 times at the start of 2025, according to Bloomberg. In comparison, the Nifty 50 trades at over 18 times forward earnings.

Demand Visibility Remains Limited

The delay in decision-making among consumers and project implementation has been cited by businesses in relation to economic uncertainty. According to Bloomberg Intelligence, businesses do not have any kind of foresight beyond a quarter ahead of time, making it difficult to estimate growth in the near future.

Both earnings season and guidance from companies continue to indicate that the demand environment is weak.

In light of earnings pressures, global uncertainties, and changing dynamics in terms of technology adoption, the industry will remain in focus.