Just before the global financial crash in 2008, the IT sector weightage in the Nifty 50 Index stood at around 9.7% and subsequently climbed to a super high weightage of around 17.7% in 2022. Now,w hen the Indian stock markets have been on a roll in the last two weeks or so , the Nifty IT index has shed a whopping 9.5% so far in the month of April and looks set to empty all its gains made over the last two decades.
Wipro has posted disappointing Q4FY25 financial results, with it being worst hit by losing market share in Europe, posting declining revenue and profit growth, and most of its verticals, like healthcare, consumer technology, telecommunication, banking, and financial services segment, etc, seeing a fall in revenue growth. After Wipro, the other bellwether large IT company, Infosys, also predicted a weaker revenue growth for FY26 on the back of global uncertainty and a cloudy environment where clients are seeing pressure on their budgets, making the IT sector look pretty disruptive in the current scenario.
The Infosys company management has also conveyed that revenue growth is expected to be flat over the next few quarters, wherein clients across verticals are pulling back on their discretionary spending. No wonder, most of the Indian IT company stocks have seen an awful start to the new financial year, making it to be the worst year to date performance since March 2004. They are now sounding the alarm bells on the current challenging global business environment. While most of the large IT companies revenue were earlier growing at 2-4% annually in US dollar terms, but now most of the industry analysts are expecting it to stagnate in FY26 on the back of tariff threats along with the adverse impact on major economies around the world.
India’s 280 billion IT services industry is facing multiple headwinds and macro challenges due to flattish growth, slowdown in profits , dip in fresh hiring, and volatility from the tariff wars across the globe. Customers are pausing existing projects and are rethinking on fresh spending due to the changing business landscape. After many months of despair, the Indian equity benchmark indices posted their strongest weekly performance since 2021 ,with the Sensex closing the truncated week at 78533 levels and the Nifty rising 415 points to settle at 23852 level.
As of last week , India’s top IT big 3 companies such as TCS , Infosys and Wipro have all posted muted FY25 results as follows : TCS closing the year with revenue at Rs 2,55,324 crores down 6% yoy , Wipro revenue at Rs 89,088 crores down 0.7% yoy while Infosys revenue closed at Rs 1,62,990 crores down 6.1% yoy . Similarly, the net profit for FY25 plunged 5.8% yoy to Rs 48,553 crores for TCS and Wipro to Rs 13,135 crores down 18.9% yoy and Infosys closing at Rs 26,713 crores, down 1.8% yoy . While both TCS and Infosys have announced that they would be hiring fresh graduates in the current financial year, Wipro has commented that it would recalibrate its campus hiring programme based on the current uncertain demand environment. Brokerage houses have also trimmed their outlook for the IT stocks for FY26 on the back of lower growth expectations and are advising their clients to shift to quality stocks in the Banking, Financial Services, and Insurance sector .