There is a continuous ups and downs in the stock market. If we look at the data, the fear of recession on investors faces is clearly seen. Especially if we look at the data of IT stock, then 16 percent to 33 percent have been broken by your peak. Due to which the combined valuation of the top 10 IT companies of the country has seen a decline of 88 thousand crores. Out of the top 10 IT shares, eight are under the grip of recession, including Infosys, HCL Tech and Tech Mahindra. LTIIIMINDTry has suffered the most shock, which has fallen 33 per cent, while Wipro has done the best, but is still 16 per cent below.

On Thursday, the stock market has seen a decline for the 5th consecutive day. The Nifty is about 15 percent below its peak. On the other hand, the Sensex has also come down more than 13 percent from its peak. By the way, in the month of March, the Sensex has seen an increase of 630.81 points. But the way the stock market is seeing a decline, it seems that even in the 6th consecutive month, there can be a mahonon of decline in Sensex and Nifty. Let us also tell you what kind of figures are being seen in the IT sector and what are the reasons that the possibility of recession entry is visible in the IT sector.

IT companies decline in shares

There is a lot of upheaval in India's IT sector. The increasing fears of recession in the US, downgrade and target price cuts have fallen by 33 per cent from their peaks, which bother investors. The market cap of top 10 IT companies has lost Rs 88,000 crore in the market cap. Due to which the Nifty IT index has reached the recession. India's largest software service exporter Tata Consultancy Services (TCS) shares have fallen by about 23 per cent, which has submerged assets worth about Rs 3.7 lakh crore by investors. Out of the top 10 IT shares, eight shares are under the grip of recession, including Infosys, HCL Tech and Tech Mahindra.

Source: National stock exchange

Ltimindtree has suffered the most shock, which has fallen 34 per cent, while Wipro has done the best, but is still 18.60 per cent below. Although the income of the third quarter gave some relief, but since then the cineri has become quite dark. The increasing tariff war, delay in cutting the interest rates of US Fed due to inflation, and increasing recession have shook the confidence of investors. The view of strong growth once for IT firms is now fading, and the sharp P/e-painting seen last year is ending rapidly. Let us also tell you why the shares of IT companies are seeing a decline.

Due to these reasons, shares of IT companies get shock

Fear of recession in America

The shadow of the US recession is hovering over the global markets, President Donald Trump's tariff has made investors restless and raised concerns about economic stability. Analysts have warned that increasing the Jio Political and Tariff Risk is disrupted short -term stability for the US and European Vacharya, which may have widespread impact on India's IT sector. JP Morgan's Chief Economist has estimated the chances of recession in the US this year, he has warned that reducing confidence in US rule may cause permanent loss to the situation as the country's investment destination. Due to which economists of Goldman Sachs and Morgan Stanley have reduced their American GDP development forecast for this year by 1.7% and 1.5% respectively.

Weak estimate of revenue growth

Global brokerage firm Morgan Stanley has reduced the revenue growth estimate in US dollars by one to two per cent for India's large IT firms, which is expected to increase by 4.5 per cent in FY 26 and 6 per cent in FY 27. The report said that we are seeing moderate growth for Indian IT companies due to softening and weakness in nominal GDP growth (America's).
Due to the attitude of the US administration and the ongoing geopolitical stresses on the tariff, analysts believe that customers are adopting vigilant 'weight and watch' vision, which may delay in decision making on IT expenses. Morgan Stanley has reduced Infosys from overweight to equal and reduced the target price of 9 IT stocks including TCS, Infosys and HCL Tech.

AI threat

Rapid development of AI is creating new concerns about its impact on the IT service industry. There is speculation on the stock market about how adopting generative AI (GenAI) can give a new shape to the competitive environment for software exporters. Kotak Institutional Equities said that the increase in adoption of JenAI in FY 26 will benefit those who challenge, while the existing companies will have to face the challenge.

Trouble with valuation

Despite the recent correction, Nifty IT's P/E ratio remains at high premium compared to Nifty's P/E. According to Motilal Oswal, the current premium of the Nifty IT is still 37 per cent of its five-year average, including the maximum valuation during the Kovid-19. The report said, “Today almost all six big cap companies are trading on equal valuation. Looking at the history, when did this happen last time. Morgan Stanley analyst Gaurav Rateria agrees that despite the decline, valuations are still on an average of five years compared to the Sensex.

Change in hopes of fed rate cut

The possibility of cutting US interest rates has decreased, which has increased the problems of the IT sector. Constant inflation in the US shows that interest rates may remain more for a long time. By the way, there has been unexpected decrease in inflation figures in America. Which will decide for the coming days whether the interest rates will be low or not. However, the fed has already indicated that there is no hurry to cut interest rates.