Indian IT stocks tumble as AI-related fears spook investors. Nifty IT slides over 4 per cent, with TCS, Infosys, Wipro, and HCL Technologies among the worst hit
Indian IT stocks faced a sharp sell-off on Thursday, with the Nifty IT index tumbling 4.50 per cent to 33,514.20 amid investor anxiety over the disruptive potential of artificial intelligence (AI) on traditional IT services.
The index opened at 34,439 and fell to an intraday low of 33,471.55. Major IT bellwethers bore the brunt of the fall: Tata Consultancy Services (TCS) dropped 4.25 per cent to Rs 2,786, Infosys slipped 4.64 per cent to Rs 1,403.60, and Wipro lost 4.41 per cent to Rs 219.67. Other large-cap IT names, including HCL Technologies, Tech Mahindra, and LTI Mindtree, also posted declines between 3.8 per cent and 5.6 per cent.
The sell-off followed steep losses in US technology stocks and IT services ADRs, driven by advances in enterprise AI tools that raised concerns about automation threatening existing software models.
Ed Yardeni, President of Yardeni Research, told CNBC TV18, “It was kind of like Game of Thrones… and suddenly, with AI, they’re [tech companies] all competing with each other.” He added that heavy spending on AI infrastructure is adding uncertainty over returns in the large-cap IT space.
Investor caution was echoed by Ashwini Agarwal, Founder and Partner at Demeter Advisor, who told CNBC TV18, “When something is getting disrupted, don’t stand in the way… stay away, let the chips fall where they may.”
Citi analysts noted that unlike the earlier cloud transition, which generated incremental work for Indian IT firms, the AI wave could affect a broader set of services and raise incumbency risks for dominant players. HSBC also highlighted that productivity gains from AI may heighten pricing pressures, although gains are unlikely to exceed 15–20 per cent.
However, not all industry leaders see an existential threat. Anish Shah, Group CEO of Mahindra and Mahindra, said the impact of AI on Tech Mahindra is ‘way overblown’, citing past industry disruptions such as Y2K, call centres, and blockchain. “The industry has always evolved,” he added.
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