The Indian IT sector is currently going through huge pressure. Shares of the country’s 4 largest IT companies i.e. TCS, Infosys, Wipro and LTIMindtree have fallen by more than 50% from their respective record high levels. Investors have suffered huge losses due to this big fall. According to the report, the market cap of 10 major IT companies of the country has fallen by about Rs 19.28 lakh crore from its high level. At the same time, shares of TCS and Infosys have now reached their lowest level since 2020.
The surprising thing is that the shares of TCS, the country’s largest IT company, have fallen the most. In August 2024, its share was at a record level of Rs 4,592.25, but now it has fallen to around Rs 2,033. That means there has been a decline of about 56%. Due to this, the market cap of the company has also decreased from Rs 16.47 lakh crore to Rs 7.35 lakh crore. That means the wealth of TCS investors alone reduced by more than Rs 9.12 lakh crore.
Infosys, Wipro and LTIMindtree also slipped
of Infosys share Has also fallen by almost 50% from its record high level. The market cap of the company has also reduced to almost half. Whereas Wipro’s share has fallen 54% below its record level. A decline of more than 53% has also been recorded in LTIMindtree. Apart from this, big IT stocks like HCLTech, Persistent Systems, Mphasis and Tech Mahindra have also seen a decline of 24% to 47%.
After all, why was there such a huge decline in the IT sector?
Experts believe that there could be two major reasons behind such a huge decline in the IT sector. The first reason is the weak economic condition of America. A major part of the earnings of Indian IT companies comes from America and North America. Due to inflation, increase in interest rates and reduction in expenditure by companies, the pace of new IT projects has slowed down.
The second and biggest reason is AI. Now Generative AI is increasingly doing many tasks like coding, customer support and back-office on its own. The tasks which earlier required a large number of IT employees are now being completed in less time and at lower cost with the help of AI. For this reason, investors fear that the earnings and profits of Indian IT companies may be affected in the coming years.
Can IT shares fall further?
Experts believe that at present the situation has not become completely normal. If interest rates remain high in America and the impact of AI increases rapidly, then the IT sector may remain under pressure. However, some experts say that companies with strong balance sheet, good cash flow and better dividends can make a comeback in the long run. But at present, instead of making big investments in haste, investors should take a thoughtful decision.
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