The Q1 verdict: Can TCS, Infosys, other IT results stop a Rs 17 lakh crore AI-led rout?

Ten major Indian IT companies have collectively lost more than Rs 17 lakh crore in market value from peak levels, with TCS alone shedding around Rs 9.12 lakh crore (down about 56 percent from its August 2024 high of Rs 4,592.25 to Rs 2,033). Brokerages including Morgan Stanley, Kotak, Nomura and Motilal Oswal expect a muted June quarter, with revenue growth for large-cap IT firms forecast between minus 1.5 percent and plus 2 percent, citing weak discretionary spending, AI-led deflation, pricing pressure on renewals and slower client decision-making. Morgan Stanley has downgraded TCS to equal-weight citing valuation premium, while Kotak has cut fair values of IT firms by up to 21 percent on GenAI deflation now assumed at the upper end of the 3 to 3.5 percent range.