Infosys, TCS, TechM and other IT stocks rally up to 5% even as sector valuations near 2008 levels

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.

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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)