TCS earnings lift IT stocks as demand recovery hopes boost market mood

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Indian IT stocks rallied after TCS reported strong Q2FY27 results, lifting hopes of a demand recovery amid AI concerns and US labour curbs

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Home / Companies / News / TCS earnings lift IT stocks as demand recovery hopes boost market moodTCS earnings lift IT stocks as demand recovery hopes boost market mood

Better-than-expected Q2 earnings and attractive valuations boost IT stocks, even as AI headwinds and US labour curbs remain concerns

IT stocks rally 3% as strong TCS results revive hopes of demand recovery.

Kairavi Lukka Mumbai 3 min read Last Updated : Oct 10 2026 | 12:11 AM IST

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Indian information technology (IT) stocks rallied on Friday, lifting the benchmark Nifty 50 and Sensex. This was driven by better-than-expected second quarter results from Tata Consultancy Services (TCS) and attractive sector valuations, which boosted investor sentiment, amid signs of a potential demand recovery. The Nifty IT ended 3.02 per cent higher on Friday, while the Nifty 50 was up 1.3 per cent. TCS shares advanced 3.85 per cent to close at ₹2,156 apiece on NSE. The stock had surged as much as 6 per cent intraday. However, it has declined 30 per cent over the last one year — the highest among stocks in the Nifty 50. It was down 15 per cent in September, due to investor worries triggered by the internal ownership war between Tata Sons and Tata Trust.    While analysts always believed that the company would be able to bounce back despite agentic artificial intelligence (AI) and other macro-economic headwinds, they did not have a clear view on how the ownership battle will affect the fortunes of TCS. But all these doubts came to an end with the latest quarterly results. The IT major reported 14.9 per cent year-on-year growth in its consolidated net profit and 11.2 per cent rise in its revenue in the July-September quarter of financial year 2027 (Q2FY27)

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 “TCS delivered strong results, with double-digit growth in both revenue and profits, signalling that the worst may be behind the IT sector and demand could be recovering,” said Aamar Deo Singh, senior vice president, research, Angel One. “OpenAI’s revenue miss has also provided a positive trigger for IT stocks. Following the recent correction, the sector is witnessing a rebound, with renewed buying interest in TCS as attractive valuations offer a good long term investment opportunity.” ICICI Securities said that TCS’ margins are likely to remain constrained due to investments for growth in AI, partnerships, sales and acquisitions.The brokerage has a ‘reduce’ rating on the stock, with a target price of ₹1,920 per share.   As per Bloomberg consensus data, 29 analysts have a ‘buy’ call on TCS, while 13 suggest to ‘hold’, and six recommend to ‘sell’ the stock. It has an average target price of ₹2,345.24 a share, implying an upside of 8.8 per cent from Friday’s close. Meanwhile, on Thursday, the US suspended several IT firms, including Infosys,TCS, Wipro and HCLTech, from the Permanent Labor Certification Programme (PERM), which enables companies to apply for green card applications for H-1B visa workers. 

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Topics : TCS Indian IT Sector Nifty IT Share price

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First Published: Oct 09 2026 | 8:27 PM IST