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Informist, Friday, Dec. 12, 2025

MUMBAI - Shares of information technology companies are likely to move in a narrow range next week, with a positive bias, analysts said. The depreciation of the rupee and the US Federal Reserve's interest rate cut are positive triggers for the sector, which has high exposure to the US and earns in dollars. Market participants will closely watch for any developments regarding the trade deal between India and the US, which has been extended beyond expectations for months. 

There is still decent room for upside in the Nifty IT index, Ajit Mishra, senior vice president of research at Religare Broking, said. Some consolidation is likely for the index, and it may eventually rise to the 40000-41000 mark, he said. On Friday, the IT index closed 0.5% higher at 38274.75 points, but snapped a four-week winning streak. 

Valuations of large-cap IT stocks are at comfortable levels following their recent corrections, analysts said. IT is among the few sectors which are trading below their 10-year average valuations. They are also not too concerned about the bubble in US artificial intelligence stocks, which has had a ripple effect on Indian players in recent months. Experts said the buzz around US AI is not affecting domestic players' valuations. 

Technology transformation through AI has been a top priority for enterprises, but initiatives have often stalled due to data quality, BofA Securities recently said in its report. Demand for such programs should now increase as the challenges are being gradually overcome, it said. Competitive dynamics had pushed IT services companies to embed AI-led productivity at a faster pace than anticipated, it added. 

Meanwhile, global brokerage house Citi reduced its target price for Tata Consultancy Services this week by 11% to INR 2,835 with a 'sell' rating. It expects demand to stabilise, with no further deterioration going forward. The flow of deals is expected to be driven by cost optimisation, vendor consolidation, operating model transformation, and rapid-build agile projects, Citi said.

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Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Anjana Therese Antony

With inputs from Arya S. Biju
Edited by Saji George Titus

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