Indian IT stocks declined on Thursday, with the Nifty IT index falling nearly 3%, after the US President Donald Trump announced sweeping reciprocal tariffs against major trading partners.
Persistent System shares led the decline among the Nifty IT constituents, falling 6.5%, followed by Coforge shares down over 4% and Mphasis stock price declining over 3%.
IT behemoths, Tata Consultancy Services (TCS), Infosys and HCL Technologies share price fell over 2% each. Tech Mahindra, LTIMindtree and Wipro shares were also trading more than 1% lower each.
US President Donald Trump imposed a 10% baseline tariff on all imports to the US and higher reciprocal tariff rates for countries that have high barriers to US imports. Trump announced a 26% reciprocal tariff on India — half the rate India imposes on US imports.
US remains the largest revenue-contributing geography for large-cap Indian IT companies, accounting for over 50% of industry revenue.
“While we do not expect IT services to face a direct impact from tariffs, restrictive trade policies affecting other sectors and countries could influence overall technology spending. Industries such as BFSI, Automotive, Retail, and Discretionary are particularly vulnerable to these macroeconomic pressures, potentially leading to a further delay in technology investments, which have already been in a holding pattern for the past two years,” said Chirag Kachhadiya, Senior Research Analyst at Ashika Stock Broking.
In the current environment, from a long-term perspective, he recommends TCS stock to buy, as the IT stock has corrected by 20% over the past four months, making its valuation more reasonable although not cheap. It is currently trading at 22x FY27 expected earnings, he said.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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