Indian IT stocks, including Infosys and Tech Mahindra, are experiencing a boost due to a combination of factors: growing hopes for a U.S. Federal Reserve rate cut and positive developments in India-U.S. trade talks.
US Fed Rate Cut Expectations Comments from Fed Chair Jerome Powell have increased market expectations of a U.S. Federal Reserve rate cut, with participants pricing in a near 100% probability of a 25-basis-point cut. This anticipation is driven by recent data indicating a weakening U.S. job market. The expectation is that lower rates will ease pressure on U.S. client budgets, encouraging new technology spending in the coming quarters, which would directly benefit Indian IT firms that derive a significant portion of their revenue from the U.S. market. A rate cut could also boost discretionary spending, further aiding these companies.
India-US Trade Talk Optimism Optimism surrounding ongoing India-U.S. trade talks has further fueled the rally in IT stocks. Former U.S. President Donald Trump stated that the U.S. and India were actively negotiating trade terms and were close to a "successful conclusion". Easing trade tensions is expected to benefit Indian IT companies, alleviating concerns over potential tariffs on software exports.
Market Performance and Analyst Views The Nifty IT index has shown substantial gains, rising significantly over the past few sessions. Improved valuations after recent corrections, along with the positive sentiment from the trade talks and potential Fed rate cut, have contributed to this upward trend.
Infosys Stock Forecast Analysts have given Infosys a consensus rating of "Buy". The average 12-month price target for Infosys is projected to be ₹1,747.68, with a high estimate of ₹2,085 and a low estimate of ₹1,440. This suggests a potential upside of over 16%. However, other analysts predict a "Hold" rating for Infosys, with an average price target of $17, forecasting a slight decrease in the stock price over the next year. Predictions vary, with some projecting increases to $18.39 by 2026, while others anticipate the stock trading between $15.57 and $17.98 in 2025. AI-driven analysis indicates that Infosys is expected to show strong bullish movement in the near term.
Tech Mahindra Stock Forecast The consensus rating for Tech Mahindra is "Neutral", based on analyst insights. The average 12-month price target for Tech Mahindra is ₹1,626.05, with a high estimate of ₹2,020 and a low estimate of ₹1,110. This represents a potential upside of around 6.56%. Predictions from other analysts vary, with price targets ranging from ₹1,627.98 to ₹1,650.23. AI-based predictions suggest that Tech Mahindra will show strong bullish movement in the short term, although another source indicates a potential downtrend. Long-term forecasts predict an increase to ₹2,106.686 by 2030.
