Shares of IT companies rose on Friday, led by Tata Consultancy Services (TCS), a day after the company beat quarterly revenue estimates on the back of new deal wins and growing AI-related revenue. The gains raised hopes of a gradual earnings recovery for the sector.
The IT index rose about 2%, with TCS trading 1.8% higher at ₹2,086 at 9:59 am. The broader gains helped push the benchmark Nifty 50 up 1.1% to 24,205.2, while the BSE Sensex climbed 1.05% to 77,536.06 by 9:42 am. Notably, the IT firm's shares rose around 4% at 9:15 am.
TCS's results marked the start of the June quarter earnings season for India's $315 billion IT sector, which has faced earnings downgrades in recent months due to slowing client spending and concerns that advanced AI tools could disrupt the business models of software firms.
1 June 2026
Get the latest issue of Outlook Business
TCS Leads Rally With 14% Revenue Growth
TCS reported a 14% year-on-year rise in quarterly revenue to ₹722.75 billion ($7.58 billion). CEO K Krithivasan said he was "optimistic" about a turnaround in tech spending among manufacturing and life sciences clients in the September quarter. The company's order book stood at $9.5 billion, while its annualised AI-related revenue rose to more than $2.6 billion.
Brokerage CLSA, quoted by Reuters, said TCS's revenue growth was better than expected, helped by strength in banking, financial services, insurance, high-tech and regional markets. "Revenue growth of TCS was better than feared, particularly after weak results from Accenture," said CLSA analysts Sumeet Jain and Mridul Goenka, adding that they expect better sequential growth across the sector in the September quarter on improving macro expectations.
HSBC said the growth picture for manufacturing, pharma and energy clients, which several IT firms serve, was "incrementally positive." Nomura analysts said deal wins across the sector, including TCS's $800 million mega deal, gave reasonable visibility for a broader growth rebound, even as macro uncertainty weighed on near-term prospects, Reuters reported.
Dr Reddy's shares fell 2.3%, extending the previous session's 5.9% decline, after the company said generic semaglutide supplies would remain unavailable in India and disrupted in Canada until late October due to impurities in the active ingredient.
Dixon Technologies gained 3% after the Indian government approved its joint venture with China's Vivo Mobile, clearing the way for the two companies to set up a smartphone manufacturing unit in India.
