Indian IT stocks tumble
- Shares of major Indian IT services plunged on April 22 as investors feared AI-driven cost cuts would hit traditional outsourcing demand. - HCLTech, TCS and Infosys fell up to 9–10% amid weak-demand concerns and an "AI-led scare". - The sell-off has investors demanding proof these firms can monetise AI, and Infosys' board reportedly discussed CEO succession amid the slump. (indiatoday.in) (livemint.com) (whalesbook.com)
Indian information-technology stocks slid sharply on April 22 after HCLTech’s results and outlook deepened fears that weak client spending is spreading across the sector. (livemint.com) The Nifty IT index fell 3.35% to 30,665.35 in early trade, with all 10 constituents in the red. HCLTech dropped as much as 9.7%, while Infosys, Tata Consultancy Services and Tech Mahindra also fell 2% to 3%. (livemint.com) HCLTech set off the sell-off after reporting March-quarter constant-currency revenue down 3.3% sequentially to $3.682 billion and EBIT margin down 200 basis points to 16.5%. The company guided for fiscal 2027 revenue growth of 1.0% to 4.0% in constant currency, with services growth of 1.5% to 4.5%. (hcltech.com) Chief executive C Vijayakumar said the quarter came in below expectations because of lower discretionary spending and delayed client decisions. HCLTech also said annualized advanced artificial-intelligence revenue reached $620 million in fiscal 2026, a figure investors weighed against the weaker core outlook. (hcltech.com) The market reaction reflected a wider problem for Indian outsourcing firms: clients are still holding back on optional projects such as software upgrades and large change programs. Mint, citing Goldman Sachs and Reuters, said the weak performance pointed to sector-wide pressure rather than an HCLTech-only issue. (livemint.com) That pressure has been building across the industry. Mint reported that Tata Consultancy Services posted its first annual revenue decline in dollar terms earlier this month, while Wipro missed earnings estimates and flagged geopolitical, policy and client-specific disruptions. (livemint.com) Infosys added another layer of uncertainty as its board prepared to discuss chief executive succession at its Thursday meeting, according to reports cited by NDTV Profit. Salil Parekh’s current term runs until March 2027, and the report said the board could consider a shorter extension because the company’s normal retirement age is 60 and Parekh is 61. (ndtvprofit.com) Under Parekh, Infosys’ market value has risen to about ₹5.44 lakh crore, and NDTV Profit said investors want continuity as the industry deals with artificial-intelligence disruption, slower deal ramp-ups and pricing pressure. The same report said Infosys shares had already fallen more than 25% from their peak valuations before the board discussion. (ndtvprofit.com) For now, the sell-off has left Indian IT companies facing the same question from investors: whether artificial-intelligence revenue can grow fast enough to offset slower spending on the traditional outsourcing work that built the sector. (hcltech.com)
