Nifty IT slides 5% as Infosys trims FY27 growth outlook

What triggered the IT selloff

Indian IT services stocks came under sharp selling pressure after Infosys issued a muted revenue outlook for FY27, pointing to a slower demand environment and weakening deal momentum. The reaction was broad-based, pulling down both large-cap and mid-tier names. Investors also weighed signs of caution in global tech spending, especially in the US and Europe, where clients remain tight on discretionary outlays. Alongside demand concerns, fresh geopolitical uncertainty, particularly in West Asia, added to risk-off sentiment.

Nifty IT drops over 5% on April 24

The Nifty IT index tanked 5.35% to 28,512.95. The fall reflected sharp declines across most constituents, with several stocks sliding 4% to 7% in the session. The move underlined how sensitive the sector has become to commentary on discretionary spending and deal pipelines.

Biggest losers: Infosys, Mphasis, Coforge, Persistent

Infosys declined 6.92%, the steepest among the large names mentioned in the update tied to guidance. Mphasis fell 6.02%, Coforge dropped 5.98%, and Persistent Systems slipped 5.74%. L&T Technology Services was down 5.00%.

Among other frontline IT stocks, TCS fell 4.91%, Tech Mahindra declined 4.67%, HCLTech dropped 4.05%, and Wipro slipped 1.78%. The breadth of the decline suggested the market treated the development as a sector signal rather than a company-specific issue.

Infosys guidance: lower FY27 growth band, margins maintained

Infosys guided for revenue growth of 1.5% to 3.5% in constant currency terms for FY27. This was lower than its earlier guidance of 3.0% to 3.5%. While the growth band was cut, Infosys maintained its operating margin outlook at 20% to 22%.

For the market, the combination of lower growth expectations and commentary around demand matters because it influences near-term earnings confidence for a sector that is heavily exposed to global enterprise tech budgets.

Large-deal TCV falls, raising questions on pipeline conversion

Adding to the concerns, the total contract value (TCV) of large deal wins fell to $1.2 billion in Q4 FY26 from $1.8 billion in Q3 FY26. The drop signalled softer deal conversion and weaker pipeline visibility, a metric investors watch closely to gauge revenue momentum in future quarters.

Earnings season pressure: HCLTech results and cautious tone

Earlier in the week, weak quarterly numbers had already weighed on the sector. NSE data showed the Nifty IT index slumped 4.95% to 30,159.45 during that session. HCLTech remained the worst hit, tumbling 10.98% to ₹1,283.00 after its quarterly earnings disappointed Street expectations.

HCLTech reported a 4% rise in consolidated net profit to ₹4,488 crore for the quarter ended March 31, 2026, versus analysts’ expectation of ₹4,657 crore (LSEG-compiled). Consolidated revenue was ₹33,981 crore, up 12.3% in the January to March quarter.

How global cues and geopolitics added to the risk-off mood

The sector’s weakness also reflected a slowdown in global tech spending, as clients across key markets such as the US and Europe remained cautious on discretionary outlays. In addition, geopolitical tensions, particularly in West Asia, heightened uncertainty in global markets. This combination typically affects IT stocks because the sector’s revenue exposure is linked to global decision-making cycles and cross-border spending confidence.

Key numbers at a glance

Company metrics investors tracked this week

Market impact and what to watch next

The immediate impact was a sharp repricing of IT stocks as guidance and deal metrics suggested slower near-term growth. Investors also paid attention to management commentary around discretionary spending and the pace of deal ramp-ups, since these influence utilisation, margins, and revenue conversion timelines.

Focus remains on upcoming and recent quarterly updates and forward-looking statements from major IT companies, including Infosys and Tech Mahindra, as the market looks for clarity on demand trends, pipeline health, and the trajectory of discretionary tech spending.

Conclusion

Nifty IT’s fall was driven by a combination of weaker FY27 growth guidance from Infosys, a drop in large-deal TCV, and a cautious earnings-season tone after HCLTech’s results. With global tech spending still showing signs of restraint and geopolitical risks elevated, the next set of earnings commentary will be central to how investors reassess sector visibility.