TCS, Coforge to Infosys: IT stocks fall up to 9% after Trump’s tariffs; Nifty IT drops over 3%

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 share price led the decline among the Nifty IT constituents, falling 9.15%, followed by Coforge share price down 6.8% and Mphasis stock price declining 4.4%.

Tata Consultancy Services (TCS) share price dipped 3.3%, while Infosys and HCL Technologies share price also fell over 3% each. Tech Mahindra shares, LTIMindtree share price and Wipro shares were also trading more than 2% lower each.

The fall in IT stocks comes amid the broader decline in the Indian stock market following a sell-off in global equities on worries over the economic impact of the trade war. 

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.

Trump Tariffs Impact on Indian IT Stocks

US remains the largest revenue-contributing geography for large-cap Indian IT companies, accounting for over 50% of industry revenue, analysts said.

Mohit Gulati, CIO and Managing Partner of ITI Growth Opportunities Fund noted that the Indian IT giants like Infosys, TCS, Wipro, and HCL Technologies have consistently demonstrated resilience, navigating through various macroeconomic and geopolitical challenges over decades.

“From global recessions to trade tensions, these companies have adapted and thrived, leveraging innovation and diversification. The current tariff concerns are just another phase in the cycle — this too shall pass. Long-term investors can rely on their proven ability to weather uncertainties and capitalize on global opportunities,” Gulati said.

Sumit Pokharna, VP-Fundamental Research, Kotak Securities believes the imposition of very high reciprocal tariffs by the US on its major trading partners, including India, will likely have large negative consequences for global and US GDP growth, global and US inflation, and the profitability of certain sectors and companies in India.

A tariff has been imposed on India, although there is no specific tariff that has been imposed on IT services.

“Notably, the US economy has weakened in recent months. Naturally, the deterioration in the macro environment will weigh on Q4FY25 numbers and FY26E guidance. We expect a sequential revenue decline for all large Indian IT service companies for the March 2025 quarter due to seasonal weakness, lower billing days, and marginal deterioration in demand. The fallout of tariff threats by the US is a slowdown and uncertainty in spending,” said Pokharna.

IT Stocks to Buy

The Nifty IT Index has corrected ~20% in the last three months due to concerns over the recession in the US and the tariff war. Investors are catching their breath and evaluating whether the negatives are already priced in, he noted.

According to him, any imposition of retaliatory tariffs on US exports by the US’s trading partners could add to global inflation, which had turned benign. Higher tariffs may result in higher inflation (versus the 2% target of the US Fed) and may impact the FED’s rate cut decision which is not conducive for the IT sector, in general.

He believes investors’ focus will soon turn squarely to a string of key technology earnings.

Infosys, TCS, Tech Mahindra, Coforge, and Indegene are his key stock picks in the IT sector.

Chirag Kachhadiya, Senior Research Analyst at Ashika Stock Broking does not expect the Indian IT companies to be directly impacted by the Trump tariffs.

“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.

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.

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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.