Nifty IT Falls Nearly 4% as Infosys Slides on Guidance Cut (October 28)

The Nifty IT falls of Wednesday, October 28, were sharp enough to stand out on an otherwise soft day. The index dropped as much as 4% to 30,928.10 on the NSE in intraday deals, and at 11:07 AM it was the worst sectoral index, down 3.4% at 31,110.45 while the Nifty 50 was down only 0.62%, Business Standard reported. Infosys led the selling.

Why Nifty IT falls hit Infosys hardest

Infosys slipped 5% to ₹1,103.40 on the NSE during the session, per Business Standard. CNBC-TV18 said the stock had fallen 5.3% over two straight sessions, wiping out more than ₹25,000 crore of market value.

The trigger goes back to its September-quarter results on Friday, October 23. Infosys cut its FY27 revenue growth guidance to 1-2% in constant currency, from 1.5-3% earlier, while keeping its EBIT margin guidance at 20-22%, according to CNBC-TV18 and ET Markets. This is the second quarter in a row that the guidance has come down. Last quarter the company trimmed the upper end to 3% from 3.5%.

The quarter itself was a touch light. Constant-currency revenue growth of 1.2% came in below the Street estimate of 1.4%, and the 21% EBIT margin missed the CNBC-TV18 poll figure of 21.3%. The company blamed softer volumes and pricing pressure from tougher competition.

The downgrades piled up

Brokerages did not wait around. Infosys drew at least four downgrades in a single day, with Axis Capital, Arihant Capital Markets and IIFL Capital Services among them, Business Standard reported, citing Bloomberg data. That pushed the stock’s consensus rating to 3.7 out of 5, the lowest since January 2024.

Target prices are spread wide. Earlier in the week ET Markets listed Nomura at Buy with a ₹1,300 target, Goldman Sachs at Neutral with ₹1,000, Morgan Stanley at Equal-Weight with ₹1,075, Citi at Neutral with ₹1,105 and Choice Institutional Equities at Reduce with ₹1,060. When the bull and bear cases sit ₹300 apart on a stock trading near ₹1,100, the market is clearly unsure how much the AI shift will eat into services revenue.

The rest of the pack

It was not only Infosys. Mphasis and Coforge fell 5-6%, and Tech Mahindra, TCS, HCLTech, Persistent Systems and LTM were down 3-4%, according to Business Standard. CNBC-TV18 noted that all 10 index stocks were trading in the red, with losses between 1% and 5%.

Part of this is plain profit booking. Till Tuesday, the Nifty IT index had rallied 12% in October while the Nifty 50 was down 0.05% over the same stretch. After a run like that, one weak guidance update from a bellwether is enough to make traders lock in gains.

The SK Hynix angle

CNBC-TV18 pointed to another factor. South Korean chipmaker SK Hynix reported record quarterly numbers that day, with operating profit up 632.1% year on year to 83.33 trillion won and revenue of 104.62 trillion won. Money that is chasing the global AI trade has been flowing towards hardware and semiconductor names, and Indian IT services stocks, which are mostly software and services businesses, have tended to move the other way.

What it means for investors

We would read Wednesday’s move as a reset of expectations, not a verdict on the whole sector. Guidance cuts, thin pricing power and the AI question are real issues, but so are the large deal wins brokerages keep citing for FY28. If you hold IT stocks, the higher volatility is a good moment to check how much of your portfolio really moves with this one sector. Our explainer on the beta of a stock helps there, and our piece on earnings surprises explains why a small miss against estimates can move a share price this much.

Disclaimer: This article is for informational purposes only and is not investment advice. Stock prices can rise or fall; please do your own research or consult a SEBI-registered adviser before investing.