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Informist, Friday, Jul. 24, 2026

MUMBAI – Information technology stocks are expected to continue their southward journey next week after sectoral players indicated cautious technology spending and artificial intelligence-led productivity concerns. While the valuations of these stocks have become "pretty cheap" after their recent sharp fall, lack of strong earnings growth visibility remains a key constraint, according to analysts tracking the sector. However, these stocks are unlikely to fall sharply from the current levels, they said.  

"I don't think the demand is not improving. That's very clearly visible, at least from commentary (by IT companies). And the clients are asking for more productivity, etc. Even the deal closing is a little bit longer period versus earlier quarters," an analyst covering the sector at a domestic brokerage said. Clients are expected to revisit their contracts, asking for higher productivity, and there will be discussions and negotiations between the companies and clients leading to further delay in deal closure going forward, the analyst added. 

Sentiment around IT stocks grew tense again this week after a flurry of warnings from both domestic and global technology players, which trimmed their growth targets, signalling a weak spending environment, longer deal conversion timelines, and AI-led deal repricing worries. Thursday, Infosys lowered the upper end of its 2026-27 (Apr-Mar) revenue growth guidance amid persisting uncertainty in the macroeconomic environment, which it earlier believed would settle down by the second half of the fiscal year. 

Shares of US tech giant Alphabet fell sharply Thursday after concerns about continued delays to its flagship AI model were aggravated by a $15 billion increase in capital spending ‌plans for 2026. The Google parent now expects to spend between $195 billion and $205 billion in capital expenditure, compared with the $180 billion to $190 billion forecast earlier. Following this, investors turned cautious over higher capital spending by other technology giants despite no clear near-term pay-off, according to analysts. "While the near-term environment remains laden with uncertainty for Indian IT companies — growth in the cloud business for Alphabet (and peers) bodes well from a medium to long-term perspective," Nuvama Institutional Equities said in a report. 

Next week, investors will watch for the June-quarter earnings announcement and post-earnings commentary by managements of mid- and small-cap IT players such as Coforge, KPIT Technologies, Happiest Minds Technologies, and Zensar Technologies.

Friday, the Nifty IT index ended at INR 28767.95 points, up 0.8% from the previous close. During the week, the index fell 1.6% after rising for three straight weeks. Next week, the index is seen finding support at 28000 points and resistance at 29380 points, Nandish Shah, technical research analyst at HDFC Securities, said.

TOP HEADLINES

* SC bans uploading of court hearings on social media, sends notice to Meta, X
* HCL Tech partners with Sarvam, Odisha govt to set up AI data centre
* Coforge signs $230-mln deal for AI transformation of European client
* Analyst Concall: Mphasis sees margin recovery in FY27 as investments pay off
* Earnings Review: Route Mobile Q1 PAT falls sharply QoQ, sales up modestly
* Earnings Review: Mphasis Q1 PAT falls on qtr, revenue growth subdued
* Analyst Concall:Cyient says to meet FY27 15% EBIT margin goal only by Q2 FY28
* Analyst Concall: Rupee, Project Maximus to help Infosys achieve margin aim
* Infosys cuts FY27 revenue growth guidance on uncertain macro environ
* IPO Alert: XtraNet Technologies IPO gets fully subscribed on day 1
* Earnings Review: Cyient Q1 PAT nearly doubles QoQ but misses estimates
* Earnings Review: Infosys revenue below Street view, net profit dn 8.6% QoQ
* Earnings Outlook: Coforge Q1 sales seen up but PAT down on acquisition costs
* Intellect Design to modernise UAE-based bank's corporate banking ops
* Earnings Review: Oracle Financial PAT up over 68% QoQ; highest in 3 quarters
* HCL Tech partners with telecom co TIM Brasil for next-gen mobile services
* Analyst Concall: Eternal plans passing on benefits of scale to customers
* TCS report shows manufacturers commited to long-term physical AI investment
* Earnings Outlook: Cyient Q1 PAT seen up on better margins; revenue to fall
* Earnings Review: Eternal's consolidated PAT tumbles 47% on qtr, misses view
* Earnings Outlook: Infosys Q1 sales seen up but PAT down on acquisition costs
* Earnings Outlook: Ramp-ups, BFS segment to pull up Mphasis Q1 sales, PAT
* Analyst Concall: Sagility retains FY27 margin guidance despite wage hiccup
 Funds ends up 6% over IPO price
* Earnings Review: Mastek Q1 PAT flat on quarter as employee costs rise
* Earnings Review: Sagility Q1 consol PAT down 16% QoQ; misses estimate
* Earnings Outlook: Mastek Q1 PAT, revenue seen up on year on UK deal wins
* India, Spain agree to advance talks on interoperability of payment platforms
* Tech Mahindra launches Consumer Agentic Experience Studio in Hyderabad
* Intellect Design Arena launches AI-enabled lending suite for credit unions
* Earnings Outlook: Sagility Q1 PAT seen down on wage hikes, revenue drop
* Analyst Concall: Tata Tech sees Q2 margin improving QoQ despite wage hikes
* AI will not diminish IT services' role, but reshape it, says Anand Mahindra
* HCLTech opens global technology centre in GIFT City, Gujarat
* Earnings Review: Tata Tech Q1 consol PAT slumps on high base but beats view
 

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

End

US$1 = INR 96.5625

Reported by Arya S. Biju

Edited by Saji George Titus

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