IT stocks remaim in red

IT stocks remain under pressure, with the BSE Focused IT index falling 3% to 35,273.05. Coforge was among the sharpest losers, down 4.43% to Rs. 1,862.75, while Infosys fell 4.42% to Rs. 1,035.10 and TCS slipped 2.59% to Rs. 2,201.50. The weakness was broad-based across the pack, with HCL Technologies, Tech Mahindra, Wipro, Persistent Systems, Tata Elxsi and LTIMindtree also trading in the red.

Trigger

• BSE Focused IT index fell 3%, extending losses for the sixth consecutive session.
• Coforge dropped over 4% after Chairman Om Prakash Bhatt resigned following internal audit concerns linked to board evaluation disclosures.
• Infosys, HCL Technologies and Tech Mahindra saw sharper cuts as sector sentiment weakened.
• Expanded US 9-11 visa fee impact weighed on margin expectations for IT firms using onsite Indian talent.
• Crude above $97 and revived Fed rate hike bets added to broader risk-off sentiment.
• The IT sector is already down sharply this year, keeping investor appetite weak.

The Coforge-specific trigger added another layer of discomfort. The company said the internal audit had raised concerns around how the board evaluation report was handled and presented, including material information about Bhatt’s own performance not being fully disclosed to the board. While Bhatt maintained in his resignation letter that he had acted in good faith, the Street appears to be reading the development as a governance overhang rather than a routine leadership transition.

The broader sector concern is margins. The higher visa fee burden, if it becomes a recurring annual cost on H-1B extensions and L-1 visas, could directly raise onsite delivery costs for large and mid-tier IT companies. This comes at a time when discretionary tech spending remains slow, deal conversion is uneven, and clients continue to push for pricing discipline.

For frontline names, the valuation cushion is visible, TCS trades around 15.9x PE and Infosys around 13.9x PE but the market is still not willing to buy aggressively because earnings upgrades are missing. The caution now is that until there is clarity on US visa costs, client budgets and Coforge’s board-level issue, IT stocks may remain vulnerable despite the recent correction.