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Nifty IT index gains more than 4% as Tier 2 companies outperform

ICICIdirect Research 18 Jul 2026 DISCLAIMER

Nifty IT index g gained more than 4 per cent, one of the best weekly gains in more than 9 month as global sell off in semiconductor and AI stocks gathered pace.
Overall, for IT results declared till now the quarter was largely on expected lines, but the gap between Tier-2 and Tier-1 players continues to widen. TechM (+6.6% YoY CC) and LTM (+6.4% YoY CC) clearly stood out, delivering better growth than peers. Their execution remains strong, deal ramp-ups are improving and they continue to benefit from better agility in a slow demand environment.
On the other hand, HCLTech (+2.6% YoY) and Wipro (+0.9% YoY CC) reported softer quarters. HCLTech’s deal wins remained healthy, but revenue growth was muted and management kept guidance unchanged on both revenue and margins front. Wipro continued to see weak growth with margin pressure and another cautious outlook for next quarter.
Across the sector, AI remains the common positive theme. Companies continue to report healthy AI pipelines, increasing production deployments and strong large deal wins, although these are still taking time to translate into revenue growth. So, demand is improving, but only gradually.
Our overall view remains unchanged. We continue to be selectively positive on the sector, preferring companies with better execution and stronger growth visibility like TechM and LTM. However, for the sector as a whole, a broad-based recovery is likely to remain gradual, with a more meaningful acceleration expected only closer to H2FY28.

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