India’s IT stocks just recorded their worst first half of a year since 2003. The Nifty IT index fell 31% between January and June 2026.
The damage to individual stocks is brutal. Infosys lost 38%, TCS fell 37% and Wipro dropped 35% in six months. From its December 2024 peak of 46,089, the index is down 43%.
Why this crash is different
Past IT slumps were about client budgets. Companies cut spending in a downturn, then spending returned. This one is about the business model itself.
Indian IT firms earn by billing armies of engineers for work done offshore. Investors now fear generative AI can do much of that work, compressing billable hours, pricing and timelines. Markets are treating this as a structural shift, not a cyclical dip. The proof is in the index itself: five major IT companies now account for under 7.6% of the Nifty 50, the lowest combined weight since at least 2002, down from over a fifth of the index at their peak.
A flicker of hope
On 9 July, TCS reported a $9.5 billion order book and $2.6 billion in annualized AI revenue, lifting the whole sector. The bet: if Indian IT can sell AI services instead of being replaced by them, the story changes.
What it means for you
If you hold IT stocks or IT mutual funds, understand you are no longer betting on a recovery. You are betting on a reinvention. The sector that built India’s middle class is being forced to prove it has a second act.
Next in this series: the government’s biggest ever loan, and why it rattled the bond market.
Sources: NSE, Business Standard (30 June 2026), Trading Economics.
