Why IT Stocks Are Falling Despite Nifty Record High

The Indian equity markets are enjoying one of their strongest bull phases in recent years. On November 27, 2025, benchmark indices scaled historic milestones, with the Nifty 50 surging to 26,310.45 and the Sensex closing at a remarkable 86,055.86. These record-breaking levels reflect widespread optimism driven by strong domestic inflows, policy stability and robust performance across banking, FMCG, capital goods and auto sectors.

However, beneath this celebratory surface lies a surprising contradiction — the Information Technology (IT) sector is still struggling to recover, with many leading stocks trading 30% to 50% below their all-time highs. While the broader market has advanced nearly 11% so far in 2025, the Nifty IT index has declined by around 13%, highlighting a clear divergence between overall market growth and IT sector performance.

Let’s take an in-depth look at why this is happening, which stocks are most affected, and which companies are defying the broader trend.

Midcap IT Stocks Suffer Steep Corrections

Tata Elxsi: A Sharp Fall from Former Glory

Once considered a high-growth favourite, Tata Elxsi has witnessed one of the steepest declines in the IT universe.

All-time high: ₹10,760
Current drawdown: 51%
YTD performance: -22.6%

The primary cause behind the correction is the dramatic slowdown in growth. The company’s constant currency growth dropped sharply from an impressive 34.3% in FY22 to just 3.1% in FY25, indicating weakening demand from global clients, especially in automotive and design-led services.

Tata Technologies: Post-IPO Enthusiasm Fades

Despite a blockbuster stock market debut, Tata Technologies has not been immune to sector-wide negativity.

Post-listing peak: ₹1,400
Current fall: 51%
YTD loss: -23.7%

Concerns around premium valuations, slower order inflows and the weakening engineering services cycle have made investors cautious, leading to a sustained decline.

KPIT Technologies: Growth Slows After Strong Rally

All-time high: ₹1,928
Decline from peak: 38%
YTD performance: -19%

Although KPIT remains structurally strong in the automotive software space, near-term moderation in revenue momentum and margin pressures have pulled the stock down significantly from its peak.

L&T Technology Services (LTTS): Impact of Global Demand Weakness

All-time high: ₹6,000
Current пад: 29%
YTD performance: -7.2%

LTTS has been impacted by reduced engineering R&D spending in Europe and the US, especially in manufacturing, aerospace and industrial automation sectors.

Largecap IT Giants Also Feeling the Heat

Wipro: Ongoing Revenue Challenges

Peak price: ₹369.9
Fall from high: 32%
YTD loss: -17%

Wipro continues to struggle with slower client onboarding, delayed project decisions and weaker guidance, which has hurt investor confidence.

TCS: Even the Leader Is Not Immune

All-time high: ₹4,592
Current decline: 31%
YTD performance: -23%

Despite its strong brand and stable client base, TCS has been affected by the global slowdown in enterprise technology spending, particularly in North America and Europe.

Infosys: Pressure from Deal Delays

All-time high: ₹2,006
Fall from peak: 22%
YTD decline: -17%

Client budget tightening and subdued deal closures have weighed heavily on Infosys’ growth projections.

HCL Technologies: Slightly Better but Still Weak

All-time high: ₹2,012
Current fall: 20%
YTD loss: -15%

Although HCLTech has performed relatively better compared to peers, it still faces margin pressures and slower demand in discretionary IT services.

Bright Spots in a Weak Sector: Midcap Outperformers

While most IT companies continue to struggle, a select few have stood tall and delivered superior performance.

Coforge

Only 6% below its all-time high
3-year return: +139%

Strong execution, consistent deal wins and resilient digital transformation services have helped Coforge outperform most peers.

Persistent Systems

Just 6% below record high
3-year gain: +230%

Persistent has emerged as one of the most reliable digital engineering firms with strong client expansion and high-margin service offerings.

These companies demonstrate that quality execution and robust business models can still thrive even during industry downturns.

Key Reasons Behind IT Sector Underperformance

Several macro and micro factors have contributed to the sector’s subdued performance:

Sluggish global technology spending, especially in the US and Europe
Delay in decision-making by corporate clients
Cuts in discretionary IT budgets
Post-pandemic valuation correction
Currency volatility affecting profit margins
Earnings downgrades and muted guidance by IT firms
Reduced deal pipeline visibility
Slowing digital transformation expenditure

Engineering R&D-focused companies have borne the brunt of these challenges, as their growth rates have fallen sharply compared to the post-pandemic boom years.

Market Outlook: Is This a Buying Opportunity?

Although IT stocks are underperforming, valuation corrections may offer long-term investors potential entry points. If global economic conditions stabilise and technology spending revives in 2026, the sector could see a gradual recovery.

However, analysts argue that selectivity is key. Companies with strong fundamentals, diversified client base, and proven execution capabilities are more likely to outperform when the turnaround begins.

Even as India’s benchmark indices continue setting new records, the IT sector paints a contrasting picture of caution and consolidation. A significant number of IT companies remain 20% to 50% below their previous highs, making them one of the weakest-performing sectors in 2025.

Yet, amid the gloom, companies like Coforge and Persistent Systems stand as clear examples of resilience and strategic growth, proving that performance is still possible even in challenging times.

As investors navigate this phase, the message is clear: while the broader market celebrates, the IT sector is quietly recalibrating — and the next breakout could emerge from today’s underperformers.

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Nifty Hits Lifetime Highs, Yet IT Stocks Remain Deep in the Red: A Complete Sector Analysis for 2025