TCS leads IT stocks decline ahead of Q3 results on Monday; index among top losers

IT stocks are trading with losses on Thursday, January 8, ahead of reporting their earnings next week. 

IT majors Infosys, TCS, HCLTech, Tech Mahindra, Wipro, are among the companies reporting their earnings from Monday, January 12.

TCS and Infosys are also among the top contributors towards Nifty 50's downside around 2 PM on Thursday.

The Nifty IT index is down nearly 2% on Thursday after gaining for two consecutive sessions. Barring HCLTech, the remaining nine stocks in the index are trading with losses.

Oracle Financial Services Software Ltd. is the top loser on the Nifty IT index, down nearly 3%.

Meanwhile, Persistent Systems, LTIMindtree, Infosys, Tech Mahindra, MPhasis, TCS, Wipro and Coforge are trading with losses ranging from 0.6% to 2.8%. On the other hand, HCLTech is up 0.7%.

Earlier this week, brokerage firm Jefferies said Indian IT stocks run the risk of earnings downgrade in the financial year 2027 and that risk could weigh on the price-and-earnings multiples of these companies.

Infosys and HCLTech are among the analyst's top picks within the largecap space, while Coforge, Sagility, IKS and Mphasis are its top picks from the midcap IT space, given the potential of their earnings per share (EPS) to grow at a compounded annual growth rate (CAGR) of 14% to 27% between FY26-28.

A day prior, brokerage firm CLSA turned cautious on the Indian IT sector, recommending investors reduce positions post the recent rally as the third quarter earnings are expected to remain highly soft.

It also downgraded HCLTech to "hold" from "outperform" and Tech Mahindra to "outperform" from "high conviction outperform". It removed Tech Mahindra from its focus list, citing concerns with the firm's revenue growth recovery over the last 18 months which it said has been in-line with its own expectations or broader Street estimates.

In terms of stock preferences, it continues to favour Persistent Systems and Coforge among the midcap space, and Infosys and Tech Mahindra remain its preferred picks in the largecap space.

Shares of TCS have also snapped a two-day gaining streak in today's session, and has seen shares worth ₹1,100 crore change hands during the trading session already. 66% of the total number of shares traded on TCS have been marked for delivery so far.

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