Finance

Nifty IT Posts Best Week in 18 Years as Wipro, Tech Mahindra Lift Mood

The Nifty IT index rose about 11.5% this week, its best in nearly 18 years, as Tech Mahindra and Wipro Q2 results and a global AI stock sell-off drew buyers back.

Raj ·Founder & Editor

Published in Finance · 5 min read · Oct 16, 2026

Indian technology park office towers at golden hour with a screen showing rising green charts, illustrating the Nifty IT rally

In this article

Indian IT stocks have just had a week few investors will forget. The Nifty IT index rose roughly 11.5% to 11.7% in the week ended Friday, 16 October 2026, its biggest weekly gain in nearly 18 years, according to CNBC-TV18 and Mint. Better-than-feared September-quarter results from Tech Mahindra, Wipro, HCLTech and TCS combined with a global sell-off in AI-linked chip stocks to send money back into a sector that had been one of 2026's worst performers.

The rally also lifted the wider market. On Friday the Sensex rose 413.66 points to 74,729.27 and the Nifty 50 gained 148.80 points to 23,146.15, a second straight weekly gain. Here is what drove the move, what the results actually showed, and why analysts are not all convinced.

A record-breaking week for IT

The Nifty IT index climbed nearly 4% on Friday alone, its fourth straight day of gains. Mint reported that the index reclaimed the 30,000 mark, touched an eight-month high and added nearly ₹3 lakh crore to the combined market value of the top 10 IT companies during the week.

Even so, the sector is still in the red for the year. According to Mint, the index had fallen about 32% at its 2026 low and is now down about 15.7% year to date, meaning the rally has recovered roughly half of this year's losses.

The broader picture was less uniform. BusinessLine noted that Bank Nifty ended nearly flat at 55,844 ahead of major bank results, while FMCG, real estate and pharma stocks fell. For the week, the Sensex gained 3.11% and the Nifty 2.77%, which CNBC-TV18 said were the benchmarks' biggest weekly gains since the first week of April 2026. Our earlier report on the Sensex's 1,533-point jump on 15 October covers the start of this rebound.

What the results showed

Tech Mahindra: profit up a third, plus a bonus issue

Tech Mahindra was the week's standout. It reported consolidated net profit of ₹1,585.6 crore for July to September, up 32.7% from a year earlier, on revenue of ₹16,180.2 crore, up 15.6%, according to the company's results release. CNBC-TV18 reported that profit beat its poll estimate, EBIT margin improved to 14.8% from 14.4% (moving closer to the company's 15% target for the end of FY27), and new deal wins totalled $1.023 billion. The board declared an interim dividend of ₹15 per share and recommended a 1:1 bonus issue, subject to approvals.

The stock rose about 7% on Friday, its biggest one-day gain since March 2020 according to CNBC-TV18, and Mint put its weekly gain at about 18.7%.

Wipro: weak profit and bookings, but a revenue beat

Wipro's numbers, released on Thursday, were mixed. Revenue rose about 9% from a year earlier to ₹24,753 crore, ahead of analysts' estimate of ₹24,627 crore, according to Reuters. Net profit slipped to about ₹3,200 crore, down roughly 1.4% to 1.9% from a year earlier depending on the measure used, as reported by Business Standard and Fortune India.

The weak spots were bookings and guidance. Total bookings came in at about $2.6 billion, down 45% from a year earlier according to Reuters, and Fortune India reported that large-deal bookings fell 58.6% from the previous quarter to $674 million. Wipro guided for December-quarter IT services revenue growth of between minus 1.5% and plus 0.5% in constant currency. Its IT services operating margin, however, improved by 50 basis points to 16.5%.

Investors focused on management's comment that two large deals delayed from the September quarter are expected to close in the current quarter. The shares rose as much as 6.55% on Friday to ₹185.45, according to NDTV Profit.

HCLTech and TCS set the tone earlier

Earlier in the week, on 12 October, HCLTech reported record quarterly net profit of ₹5,132 crore, up 21.2% year on year, and raised its FY27 constant-currency revenue growth guidance to 2.5%-4% from 1%-4%, CNBC-TV18 reported. Its advanced AI revenue rose 78% year on year in constant currency to $219 million. TCS, which reported on 8 October, posted net profit of ₹13,934 crore, up about 15%, according to Business Today. CNBC-TV18 said TCS shares have risen nearly 19% since those results.

The "reverse AI trade"

Earnings were only part of the story. Global AI stocks have fallen sharply in recent days on worries about slowing revenue growth, the cost of financing AI infrastructure and possible further rate hikes. Bloomberg, in a report carried by Business Standard, said an MSCI gauge of global chip stocks fell 7.4% this week while Indian software exporters rose more than 10%, putting India's IT sector on course for its biggest weekly outperformance over chipmakers since 2004.

"If the correction in semiconductors gains momentum, as it has this week, foreign investors will start looking at Indian IT stocks," Rajat Agarwal, an Asia strategist at Societe Generale, told Bloomberg. Valuations also helped: stocks in the Nifty IT index were trading at less than 17 times one-year forward earnings, nearly two standard deviations below their five-year average, according to the same report. For background on the AI valuation debate, see our piece on the IMF's AI bubble warning.

Why some analysts remain cautious

Not everyone thinks one week changes the trend. Morgan Stanley analysts wrote that "the sector lacks near-term catalysts", even though valuations look reasonable, according to the Bloomberg report.

Brokerages were split on Wipro. Business Standard reported that Nirmal Bang kept a "Sell" rating with a target price of ₹143, arguing that the shrinking order book weakens the growth case. Dam Capital stayed "Neutral" with a ₹180 target, and PL Capital kept "Hold" while raising its target to ₹166 from ₹154. Jefferies, cited by Reuters, said revenue and margins beat expectations.

The wider economy also poses risks. BusinessLine reported Brent crude near $105.70 a barrel, the rupee around 94.79 to the dollar with RBI support, and the US 10-year Treasury yield near 5.09%, all headwinds for foreign inflows. Our recent look at the Indian stock market after the RBI rate hike explains those pressures in more detail.

What comes next

Bank results: HDFC Bank, ICICI Bank and Axis Bank are scheduled to report on Saturday, 17 October, according to BusinessLine.
Jio Platforms IPO: The ₹30,213 crore issue opens on 21 October and could test market liquidity. See our Jio Platforms IPO explainer.
Infosys: The sector bellwether reports on 23 October.

What it means for you

Don't chase one week. An 11% weekly jump comes after a deep fall. The index is still down for 2026, and analysts disagree on whether the recovery will last.
Check your exposure. Many large-cap, flexi-cap and Nifty index funds hold big IT positions, so you may already own more of this rally than you think.
Watch guidance, not just profits. Wipro's weak bookings show that future deal wins matter as much as last quarter's numbers.
Bonus shares don't add value by themselves. Tech Mahindra's 1:1 bonus doubles your share count but roughly halves the price per share.
Rebalance if needed. If the rally has pushed your portfolio away from its target mix, our guide to rebalancing your portfolio can help.

This article is for information only and is not investment advice.

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Written by Raj

Founder & Editor

I write HorizonDesk: practical, no-hype articles on technology, money, business and the vehicles we drive. Everything here is something I’ve researched, tested or wanted explained clearly myself.