{"id":2855,"date":"2026-10-22T08:34:05","date_gmt":"2026-10-22T08:34:05","guid":{"rendered":"https:\/\/newsraise.com\/in\/2026\/10\/22\/it-rally-market-cap-foreign-investors\/"},"modified":"2026-10-22T08:34:05","modified_gmt":"2026-10-22T08:34:05","slug":"it-rally-market-cap-foreign-investors","status":"publish","type":"post","link":"https:\/\/newsraise.com\/in\/2026\/10\/22\/it-rally-market-cap-foreign-investors\/","title":{"rendered":"IT rally adds \u20b93.87 lakh crore market cap, foreign investors buy \u20b96.5 bn"},"content":{"rendered":"\n<!-- Quick Adsense WordPress Plugin: http:\/\/quickadsense.com\/ -->\n<div class=\"9fece8afa224fd09e54b043d0febfb58\" data-index=\"1\" style=\"float: none; margin:10px 0 10px 0; text-align:center;\">\n<script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script>\r\n<!-- NR ATF -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-8898941184964366\"\r\n     data-ad-slot=\"4839033563\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script>\n<\/div>\n<p>October saw a pronounced rally across India\u2019s large\u2011cap information\u2011technology (IT) universe, pushing the combined market capitalisation of Nifty IT stocks from roughly \u20b922.01\u202flakh\u202fcrore to \u20b925.88\u202flakh\u202fcrore \u2013 an increase of about \u20b93.87\u202flakh\u202fcrore. The surge was led by several heavyweight names, with Tata Consultancy Services (TCS) posting the strongest monthly gain of 23\u202fpercent. Tech Mahindra, Mphasis, Wipro, Infosys and HCL Technologies also posted double\u2011digit advances, ranging between 16\u202fpercent and 20\u202fpercent.<\/p>\n<h2>Broad\u2011based gains across large\u2011cap IT<\/h2>\n<p>The rally was not confined to a single stock. Tech Mahindra climbed 20\u202fpercent, while Mphasis and Wipro each rose 19\u202fpercent. Infosys added 17\u202fpercent to its valuation and HCL Technologies grew 16\u202fpercent over the same period. Oracle Financial Services Software was the lone exception, slipping about 5\u202fpercent as the rest of the sector marched higher.<\/p>\n<p>These gains lifted the aggregate market value of the Nifty IT index by nearly \u20b94\u202flakh\u202fcrore, underscoring the breadth of the recovery. The uplift reflects both price appreciation and the relative resilience of IT earnings, even as the broader economy contends with macro\u2011economic headwinds and the early\u2011stage impact of artificial\u2011intelligence (AI) driven deflation.<\/p>\n<h2>Foreign portfolio inflows and shareholding shifts<\/h2>\n<p>Foreign portfolio investors (FPIs) played a notable role in the rally. National Securities Depository Limited (NSDL) data indicate that FPIs purchased approximately \u20b96,463\u202fcrore worth of IT equities during the third quarter. The buying was selective, with the share of foreign ownership rising in several key stocks.<\/p>\n<p>Wipro\u2019s foreign holding increased from 8.85\u202fpercent in June to 9.46\u202fpercent in September, while Infosys saw its foreign stake climb from 27.09\u202fpercent to 27.44\u202fpercent over the same interval. Oracle Financial Services Software recorded a jump of 173 basis points, reaching an 11.43\u202fpercent foreign ownership level. In contrast, Persistent Systems reported no change in foreign participation, and both TCS and Mphasis experienced marginal declines in their foreign\u2011owned percentages.<\/p>\n<h2>Analyst outlook on valuation and growth<\/h2>\n<p>Market participants attribute the rally primarily to a price\u2011to\u2011earnings (PE) rerating rather than to fresh revenue growth or earnings\u2011per\u2011share upgrades. Jefferies analysts Akshat Agarwal and Ayush Bansal note that sentiment around the long\u2011term growth outlook for Indian IT firms has improved. They point to stable consensus expectations for U.S.\u2011dollar revenue growth through FY28, which have not been materially revised after the 2QFY27 results\u2014a contrast to the cuts observed after 4QFY26 and 1QFY27. Additionally, they argue that continued delivery of growth despite a weak macro environment and AI\u2011related price pressures has encouraged investors to reassess terminal growth assumptions.<\/p>\n<p>Jefferies\u2019 internal modelling suggests that current equity prices imply an organic constant\u2011currency revenue growth range of 0\u202fpercent to 9\u202fpercent for large\u2011cap IT firms over FY26\u2011FY36, and 6\u202fpercent to 14\u202fpercent for mid\u2011size players. These implied rates sit roughly 2\u20114 percentage points below the growth actually delivered between FY16 and FY26. Within this framework, Infosys and Sagility appear most heavily discounted relative to their historical trajectories, with implied growth about six percentage points lower than past performance. The brokerage sees only Infosys and TCS among large\u2011cap names as having meaningful upside for further PE rerating, while Sagility stands out among mid\u2011cap stocks.<\/p>\n<p>HSBC\u2019s assessment paints a more cautious picture. The firm notes that the FTSE India IT index trades at around 18 times forward earnings, below its five\u2011year average of roughly 23 times. The lower multiple reflects a slowdown in sector earnings growth, which has slipped from a modest 4\u20115\u202fpercent in recent years to about 2\u20113\u202fpercent, a decline the bank attributes largely to AI\u2011induced deflation. HSBC projects FY27 as the most challenging year for the sector, with a tentative recovery in FY28 and FY29 that would only lift growth into the mid\u2011single\u2011digit range.<\/p>\n<p>Domestic fund houses echo the tempered tone. Axis Mutual Fund remains underweight on IT services, arguing that AI\u2011related spending is still concentrated in infrastructure build\u2011out rather than discretionary technology services. The fund highlights pressure on traditional service lines and suggests that AI may act as a margin and growth overhang before becoming a substantive revenue contributor.<\/p>\n<p>Similarly, PL Capital maintains a 150\u2011basis\u2011point underweight stance on the sector. The firm cautions that the industry faces lingering uncertainty over AI\u2019s impact on profitability, and that while large firms are likely to endure, intermittent volatility could persist due to pressures on realisations, growth and margins. PL Capital adds that mid\u2011cap IT companies might adapt more quickly to the evolving environment and could present better growth prospects, though valuations in many of those names remain demanding.<\/p>\n<p>Collectively, these viewpoints suggest that the market is pricing a selective recovery rather than a sweeping sector\u2011wide turnaround. Jefferies warns that valuation upside for large\u2011cap IT firms becomes less compelling beyond earnings multiples of 17\u201118\u202ftimes unless the growth narrative improves markedly.<\/p>\n<p>In summary, the October rally has delivered a sizable lift to the Nifty IT market cap and attracted significant foreign capital, yet analysts remain cautious. The sector\u2019s forward trajectory appears tied to how quickly companies can translate AI developments into sustainable revenue streams and whether earnings growth can rebound to levels that justify higher multiples.<\/p>\n\n<div style=\"font-size: 0px; height: 0px; line-height: 0px; margin: 0; padding: 0; clear: both;\"><\/div>","protected":false},"excerpt":{"rendered":"<p>India&#8217;s large\u2011cap IT stocks surged in October, lifting the Nifty IT market cap by \u20b93.87\u202flakh\u202fcrore while foreign investors added \u20b96.5\u202fbillion, prompting mixed analyst views on valuation and growth prospects.<\/p>\n","protected":false},"author":3,"featured_media":2856,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[299],"tags":[1759,2817,3177,3175,3176],"class_list":["post-2855","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-foreign-investment","tag-it-stocks","tag-jefferies-analysis","tag-market-rally","tag-nifty-it","entry"],"_links":{"self":[{"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/posts\/2855","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/comments?post=2855"}],"version-history":[{"count":0,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/posts\/2855\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/media\/2856"}],"wp:attachment":[{"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/media?parent=2855"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/categories?post=2855"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/tags?post=2855"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}