Tech Mahindra, Wipro shares rally up to 7% post Q2; Nifty IT tops sectoral indices

Shares of information technology (IT) stocks witnessed broad-based buying on Friday as investors cheered the September-quarter earnings of Tech Mahindra and Wipro, which were announced after market hours on Thursday. The results lifted the broader IT pack even as the broader market witnessed volatile trade, swinging between gains and losses.

Reacting to the Q2 numbers, Tech Mahindra shares surged as much as 6.93% to ₹1,765.50 on the NSE, while Wipro advanced 4.54% to ₹182.28. Infosys rose 3.73% to ₹1,156.50.

Tata Consultancy Services (TCS), the most valuable IT stock, gained 3.43% to ₹2,434, while HCL Technologies shares were up 2.07% at ₹1,379.50.

The Nifty IT index climbed 2.87% to 31,602.10, outperforming the benchmark indices, with the Sensex and Nifty trading marginally higher by around 0.2% each, paring their opening losses.

Tech Mahindra posts 33% profit growth, announces bonus issue

Tech Mahindra reported a 32.7% year-on-year (YoY) increase in consolidated net profit to ₹1,585.6 crore for the September quarter of FY27, compared with ₹1,194.5 crore in the year-ago period. On a quarter-on-quarter (QoQ) basis, net profit rose 8.2% from ₹1,465.1 crore in the June quarter.

Revenue for the September quarter increased 12.6% YoY to ₹15,711.9 crore from ₹13,994.9 crore a year earlier. Sequentially, revenue grew 2.6% from ₹15,319.1 crore in the June quarter.

The company’s board also recommended a 1:1 bonus share issue, its first in more than 11 years. Under the proposal, shareholders will receive one fully paid-up equity share for every existing share held, with the record date to be announced separately.

Wipro gains despite weak deal bookings and cautious outlook

Wipro shares advanced despite the company reporting a decline in net profit and flagging weak deal bookings. Its consolidated net profit stood at ₹3,199.7 crore in the September quarter, down from ₹3,352 crore in the June quarter.

Revenue in rupee terms rose 0.8% QoQ to ₹24,667 crore from ₹24,478.6 crore. In dollar terms, revenue declined marginally to $2,611.5 million from $2,614.5 million in the previous quarter.

Total deal bookings stood at $2,595 million, down 22.9% sequentially, while large deal wins fell 58.6% in constant-currency terms to $674 million.

The Bengaluru-based IT services company expects revenue growth in the December quarter to range from a 1.5% decline to a 0.5% increase sequentially in constant-currency terms. Its operating margin, however, improved to 16.5% from 16% in the June quarter.

Despite the cautious outlook, Wipro’s shares rose as investors weighed its revenue performance and margin improvement against concerns over deal momentum.

IT stocks find support from improving earnings sentiment

The latest gains extend the recovery in IT shares, with investors assessing whether recent quarterly results point to a stabilisation in technology spending and demand for IT services.

V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said better-than-expected second-quarter results and positive management commentary had contributed to the sector’s revival.

“The good results from the IT majors and the positive management commentary have led to a smart 9% revival in the IT index contributing to the resilience of the Nifty,” Vijayakumar said.

He added that results from telecom, banking, automobile and metal companies could provide further fundamental support to the broader market.