BSE IT index set to report 2nd sharpest monthly rally in over two decades
Thus far in the month of October, the BSE IT index rallied 14.8% while it surged 14.7% in July 2026. Earlier in July 2020, the IT index soared 22.6%, data shows.
Information Technology share price movement Information technology (IT) shares were trading firm on the bourses, with the BSE IT index gaining over 1 per cent in Friday's intraday deals in an otherwise subdued market on expectations of a gradual growth improvement in the next financial year 2027-28 (FY28). Meanwhile, thus far in the month of October, the BSE IT index rallied 14.8 per cent, and is set to report its second sharpest monthly rally in the past over two decades. Earlier, in July 2020, the index had zoomed 22.6 per cent, shows the BSE 20-year monthly data.
Infosys, LTM, L&T Technology Services (LTTS), Coforge, Wipro, Tech Mahindra, HCL Technologies, Persistent Systems and Tata Consultancy Services (TCS) were up in the range of 1-4 per cent on the BSE in Friday’s intraday deals. In the past month, TCS, Infosys, HCL Technologies, Wipro, LTTS, Tech Mahindra and Coforge rallied between 16-32 per cent. Why have IT stocks outperformed the market?
The Indian market lagged its global counterparts due to AI-driven momentum. However, the recent sell-off in global AI-driven stocks fuelled by concerns about Fed interest rate hikes and financing of AI investments, could serve as a supportive tailwind for the growth-oriented Indian market, potentially attracting foreign institutional investors (FII’s) in the near future, ICICI Securities said in a recent note. Share price of Coforge hit a record high of ₹2,049.55, surging 5 per cent on the BSE in intraday trade.
In the past month, the stock rallied 17 per cent after the company delivered strong September 2026 (Q2FY27) earnings, with 10.9 per cent quarter-on-quarter (QoQ) constant currency revenue growth and 3.8 per cent organic growth, while order intake exceeded $1 billion and the executable order book rose 45 per cent YoY to $2.4 billion. ALSO READ: Stock Market LIVE: Sensex up 200 pts; Nifty India Defence down 2%; RIL falls ahead of Q2 result Analysts at Choice Institutional Equities view the combination of sustained deal momentum and a structurally higher margin profile as the key positive, supporting a stronger earnings trajectory ahead and they upgraded FY27/FY28 EPS estimates by 3.3 per cent/8.3 per cent, respectively. The brokerage firm raised Coforge's target price to ₹2,320 from ₹2,135 while maintaining a 'Buy' rating on the stock.
Meanwhile, Cognizant's guidance revised down at the midpoint indicates that the demand environment remains uncertain. Though quarterly orderbook trends could be lumpy, trailing twelve months bookings trends need to be monitored going forward. The Financial Services vertical did well for Cognizant as seen for Indian IT as well.
Analysts at JM Financial Institutional Securities reiterated that the demand environment remains uncertain and that a sustained recovery is yet to emerge. While the brokerage firm expect growth to improve gradually in FY28E, it remains selective and prefers companies with greater earnings visibility. FPIs increase stake in IT companies during September quarter Foreign institutional investors (FPIs) accumulated equity shares of the frontline IT companies during the July to September quarter.
According to shareholding pattern filed by the companies, FPIs increased their holding in Tech Mahindra and Oracle Financial Services by 2.1 percentage points and 1.7 percentage points, respectively. In Infosys, HCL Technologies, Wipro, Coforge and LTTS, they increased their stake by up to 1 percentage point, data shows. Of these, Oracle Financial Services’ stock price zoomed 60 per cent, while Tech Mahindra rallied 36 per cent from their respective 52-week lows touched in March 2026.
HCL Technologies and LTTS soared 37 per cent and 38 per cent, respectively, from their July 2026 lows. Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.
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