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IT Stocks Today: Indian IT stocks rise as Cognizant beats Q1 estimates, lifts outlook; AI demand, BFSI rebound boost sector sentiment
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Indian IT stocks gained traction on May 2 after Cognizant Technology Solutions reported strong Q1 results and raised its full-year revenue forecast, driven by growing demand for AI-powered IT services. Shares of TCS, Infosys, Wipro, and HCL Technologies climbed up to 1.5%, outpacing the 1% rise in the Nifty IT index.
Despite being down nearly 17.5% year-to-date, the Nifty IT index has staged a comeback—rallying around 11% since April 9. The rebound followed U.S. President Donald Trump’s decision to pause reciprocal tariffs for 90 days, easing concerns for Indian exporters.
Cognizant, which follows the calendar year for its financials, reported Q1 revenue of $5.1 billion—a 7.5% YoY growth (8.2% in constant currency)—beating both the upper end of its guidance and Wall Street estimates of $5.07 billion. Net profit surged 21% to $663 million for the quarter ended March 31, 2025.
The company reaffirmed its full-year constant currency revenue growth outlook of 3.5–6%, while cautioning of a sequential slowdown in Q2, projecting growth of 5–6.5%.
CFO Jatin Dalal said there were no significant macro disruptions or client cancellations in Q1, though some impact is expected in Q2. Financial services demand remained strong.
Total bookings for the quarter came in at $26.7 billion, up 3% YoY, with a book-to-bill ratio of 1.3x. However, quarterly bookings dipped 7% compared to the same period last year. The company secured four $100-million-plus deals during Q1, down from ten in the previous quarter.
Cognizant shares rose about 0.5% in after-hours trading on the Nasdaq following the earnings announcement.
According to CLSA, a recovery in the healthcare and BFSI sectors—especially after a prolonged slump in the latter—signals a positive shift for Indian IT companies with significant exposure to these verticals.
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