Indian IT Stocks Add ₹2.6 Lakh Crore as Nifty IT Gains 12%

IT Stocks (

, Wipro, etc) Add ₹2.6 Lakh Crore as AI Fears Trigger a Reversal Indian IT stocks staged a sharp comeback this week, adding approximately ₹2.6 lakh crore in market capitalization as the Nifty IT index gained 12%, becoming the best-performing sectoral index. Better-than-expected Q2 earnings, encouraging management commentary and a global selloff in AI-linked stocks helped revive investor sentiment. What Triggered the Rally? - Tech Mahindra led the Nifty IT index with a weekly gain of over 16%, followed by Wipro at 13%. TCS, Infosys and HCLTech each advanced around 12%. - TCS reported a 15% year-on-year increase in Q2 net profit to ₹13,884 crore and declared a second interim dividend of ₹12 per share. - Accenture’s management reiterated that demand created by AI could ultimately exceed demand displaced by automation, reinforcing optimism around enterprise AI services. - Global AI-linked stocks faced selling pressure amid concerns over elevated valuations, rising financing requirements and uncertainty about returns on massive AI investments. My View The IT sector’s recovery reflects a shift in market expectations rather than proof that the AI disruption debate is over. Strong quarterly results and positive management commentary have supported sentiment, while the correction in global AI stocks has encouraged investors to reassess whether fears around traditional IT services had become excessive. However, the long-term outlook still depends on how quickly enterprises adopt AI, whether Indian IT companies can monetise these opportunities and how effectively they protect margins. After such a sharp weekly rebound, volatility and profit-booking remain possible. Investors should focus on revenue growth, deal conversion, AI-led business opportunities and valuations rather than assuming the rally guarantees a sustained sector recovery.