Shares of Indian IT companies, including Infosys and TCS, jumped up to 5% on Tuesday, extending their rebound from the previous session. The momentum in IT counters comes after a sharp correction that has dragged sector valuations closer to levels last seen during the 2008–09 subprime crisis.
The Nifty IT index jumped more than 4% to hover near 29,566 on Tuesday morning, while the broader Nifty index was trading with only marginal gains. The sectoral index has now gained more than 8% (over 2,205 points) in just three sessions.

Heavyweight Infosys shares were the top gainers on the index, jumping nearly 5% to trade at Rs 1,198 apiece on NSE. Shares of the IT major have now risen about 9% over the past three days, but remain down 27% in 2026 so far and 10% over the past month.

Coforge, LTI Mindtree, HCL Technologies, Mphasis, Persistent Systems and Tech Mahindra shares jumped around 4% each on Tuesday, while OFSS and Tata Consultancy Services (TCS) shares surged more than 3% each. Wipro shares rose over 2%.

AI shock makes IT valuations cheaper

Shares of TCS, Infosys, HCL Tech and Wipro are currently trading with price to earnings (P/E) ratios ranging between 15 and 19, nearly half of the peak valuations that these IT stocks once commanded around four years ago.

These stocks saw a sharp decline early in 2026 after AI startup Anthropic launched plug-ins for its Claude Cowork agent, which could automate tasks across legal, sales, marketing and data analysis. “We call it the ‘SaaSpocalypse,’ an apocalypse for software-as-a-service stocks,” Bloomberg quoted Jeffrey Favuzza from the equity trading desk at Jefferies as saying.
While the doomsday prophets continue to debate about the future of the IT companies following fresh AI advancements, investors were quick to analyse the cheap valuations. Additionally, a sharp decline in the rupee also helped the IT stocks, as the IT companies mostly derive their revenue in US dollars.

Goldman Sachs on Infosys

Goldman Sachs kept a ‘Neutral’ rating on the shares of Infosys, with a target price of Rs 1,290 apiece. This implies an upside potential of nearly 13% from the stock’s previous closing price. The firm, in a note, highlighted key takeaways from Infosys’ management meeting.

Despite a soft discretionary spending environment, Infosys management highlighted strength in BFSI and EURS verticals and continued strong deal wins, Goldman Sachs noted, adding that some AI-driven deflation is likely in parts of the value chain, although Infosys expects it to be offset as new TAMs open up.

Also read: Why 10 stocks suffered massive Rs 17,000 crore mutual fund selloff in April

Infosys sees scope for a partnership approach with frontier model companies as enterprises deploy AI, rather than services companies being rendered redundant due to AI adoption, Goldman Sachs further said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Shares of defence stock Apollo Micro Systems surged over 7% to Rs 334.55 in Tuesday’s trade after the company posted a robust Q4 performance, driven by sharp growth in profit, revenue, and a strong order pipeline.

The company reported a massive 163% jump in consolidated net profit for the March quarter at Rs 36.8 crore, compared with Rs 14 crore in the same quarter last year. Revenue from operations soared 81% year-on-year to Rs 293.3 crore from Rs 161.8 crore.

For the full financial year FY26, Apollo Micro Systems delivered stellar growth across key metrics. Consolidated profit climbed 90% to Rs 107.4 crore from Rs 56.4 crore in FY25, while revenue from operations surged 61% to Rs 904.3 crore against Rs 562.1 crore a year ago.

Adding further strength to its outlook, the company’s consolidated order book stood at Rs 1,432 crore as of March 31, 2026, highlighting strong business visibility ahead.

Commenting on the performance, Managing Director Baddam Karunakar Reddy said FY26 was a “breakthrough year” for the company, marked by record revenue and profitability, the successful completion of the IDL Explosives acquisition through ADIPL, receipt of the DPIIT license for UAV manufacturing, and the company’s first export order.

He also revealed that another acquisition through ADIPL is expected to be completed before the end of the next financial year, which could further strengthen the company’s growth trajectory and business capabilities.
The stock has been a multibagger performer, rallying an impressive 141% over the past year. Apollo Micro Systems currently commands a market capitalisation of Rs 11,111 crore, while its 52-week high stands at Rs 354.70.On the valuation front, the stock trades at a price-to-earnings (P/E) ratio of 124.43 and a price-to-book (P/B) ratio of 15.69, indicating premium market valuations amid strong growth expectations.

Technically, the momentum remains bullish. According to Trendlyne data, the stock’s RSI (14) stands at 61.6, a level that suggests positive momentum without entering overbought territory. The stock is also trading above all eight key simple moving averages (SMAs), reinforcing the ongoing bullish trend.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Puravankara shares rallied 12.98% to Rs 240.14 during Tuesday’s trading session after the real estate developer reported a strong turnaround in its fourth-quarter earnings and robust revenue growth.

The company posted a consolidated net profit of Rs 114.2 crore in Q4FY26, compared with a net loss of Rs 85.5 crore in the corresponding quarter last year, marking a sharp recovery in profitability.

Revenue from operations surged 177% year-on-year to Rs 1,502 crore in the March quarter, against Rs 542 crore reported in the same period last year.

According to the company’s investor presentation, Puravankara delivered strong operational and financial performance during FY26. Total revenue for the financial year stood at Rs 3,846 crore, registering an 84% increase from Rs 2,093 crore in FY25. The company also returned to profitability with a PAT of Rs 58 crore in FY26, compared with a loss of Rs 186 crore in the previous fiscal.

Sales volume during FY26 rose 28% year-on-year to 7.25 million square feet, up from 5.67 million square feet in FY25. Average realisation improved 21% YoY to Rs 10,213 per square foot, while EBITDA margin expanded to 21% from 18% a year ago.

The stock has climbed nearly 15% over the past week, taking the company’s market capitalisation to around Rs 5,053 crore. Its 52-week high stands at Rs 338.95.
According to Trendlyne data, the stock’s RSI (14) stands at 51.2, indicating neutral momentum. An RSI below 30 is generally considered oversold, while a reading above 70 signals overbought territory. The stock is currently trading above seven out of eight key simple moving averages (SMAs), although it remains below its 200-day SMA, suggesting a mixed long-term technical trend.Shareholding data for the March 2026 quarter showed a marginal reduction in institutional holdings. Foreign Institutional Investors (FIIs) trimmed their stake from 17.18% to 16.73%, while mutual fund holdings declined slightly from 0.09% to 0.08%.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

The Indian IT sector has been through a prolonged phase of underperformance, and according to Dhananjay Sinha from Systematix Group, the recent interest in the space appears more tactical than structural. Over the past 12 to 18 months, the sector has seen significant derating amid concerns over US outsourcing policies and weaker earnings guidance from companies.

As he notes, “That has been the past.” At the same time, market leadership that had shifted towards banking stocks is now showing signs of fatigue as investor conviction weakens. He points out that “People might be now shifting back to IT to some extent,” but adds that this is likely to be a defensive move rather than a fundamental turnaround in the sector’s outlook.

On the macroeconomic front, rising crude oil prices are once again becoming a key inflation driver. With oil hovering at elevated levels, concerns around under-recoveries and pass-through effects are building. Sinha highlights that “At $100 we have seen that crude has actually been hovering around there,” and warns that government price adjustments remain insufficient. He adds that “We think that that is very inadequate,” indicating that further fuel price increases may be needed. The broader implication, he suggests, is that inflationary pressures are likely to persist, with “There will be pass through of higher energy prices on inflation,” and WPI inflation potentially rising beyond current expectations.

Turning to monetary policy, Sinha believes the Reserve Bank of India is facing a narrowing policy corridor. He observes that the central bank may initially overlook inflation spikes, but discomfort will rise if inflation crosses key thresholds. “The RBI will actually try to look through the initial surge,” he says, but cautions that “They will actually get more uncomfortable is when it starts going beyond 5%.” In his view, real interest rates could turn negative if inflation stays elevated, which would eventually force the RBI to consider rate hikes. He also flags currency pressure as an additional constraint, noting that “We do anticipate the rupee actually weakening quite sharply,” while RBI’s capacity for intervention may be diminishing.

On the broader macro narrative, Sinha challenges the long-held “Goldilocks” view of the Indian economy. He argues that rising energy-driven inflation will gradually feed into production costs, consumption, and corporate earnings. As he puts it, “We think that with an increase in cost inflation because of the elevated energy prices…” and this will impact “the overall spending power.” The result, he suggests, is a shift away from the idea of strong growth with low inflation toward a more difficult environment of slower growth and higher inflation. “There will be a slow growth and higher inflation,” he says, adding that “That is what we think as a stagflationary situation.”

Overall, the commentary paints a picture of a market and macro environment in transition, where sector rotation is being driven more by defensive positioning, while inflation, currency dynamics, and policy constraints increasingly dominate the outlook.

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