Indian IT stocks rally despite US PERM suspension as TCS Q2 results lift sentiment

IT stocks rally: Shares of information technology companies, including TCS, Infosys, HCLTech and Wipro, climbed by as much as 4% on Friday as investors reacted to a mix of developments, including TCS's second-quarter results and the US decision to suspend an employment certification programme.Wipro advanced nearly 3% during the session, reaching an intraday high of Rs 163. TCS rose more than 4% to touch Rs 2,163 following its Q2 earnings announcement. HCLTech and Tech Mahindra gained around 3% each. Among midcap IT stocks, Coforge advanced 3%, while Persistent Systems surged 4%.Why IT stocks are in focusTCS Q2 results:Tata Consultancy Services, India's largest IT services company, posted a 15% year-on-year (YoY) rise in consolidated net profit to Rs 13,884 crore in the second quarter, against Rs 12,075 crore in the same period last year. The company's board also announced a second interim dividend of Rs 12 per share for the financial year 2026-27.TCS's revenue increased 0.5% quarter-on-quarter in constant currency terms. Its operating margin stood at 24%, while the net margin was 19%.CEO and Managing Director K Krithivasan said the company recorded growth across international markets and most industry segments. He also said the Porsche and Best Buy deals marked a new category of transformation partnerships, with TCS working alongside clients to develop repeatable platforms that can help industrialise AI deployment at scale.Suspension of PERM applications: On Thursday, the US Department of Labour announced that Microsoft and Adobe had been suspended from the Permanent Labour Certification Programme amid multiple ongoing federal investigations involving the companies, US Labour Secretary Keith Sonderling said.The department also said it would stop accepting new applications from Cognizant, Infosys, Capgemini, Wipro, TCS and HCLTech and halt the processing of applications involving these companies.Sonderling said the firms had collectively sought nearly three million foreign workers since 2009, receiving more than 230,000 H-1B visa approvals and over 100,000 permanent labour certifications.Reacting to the move, IT industry body NASSCOM said Indian technology companies had significantly reduced their dependence on H-1B visas while progressively expanding local recruitment to build their workforce in the US.OpenAI's revenue run rate falls short of earlier indication: OpenAI informed investors that its annualised revenue for September was close to $50 billion, below the level it had previously indicated, Reuters reported. At an earlier event, the company had told investors that its September revenue run rate was approaching $70 billion.According to the Reuters report, the discrepancy was largely linked to an effort to draw a direct comparison between OpenAI's revenue and that of its rival Anthropic.The disclosure could have implications for Indian IT companies by bringing greater attention to demand for AI services, implementation and enterprise integration. As global AI businesses expand, Indian technology firms could win additional contracts to help companies deploy AI tools, modernise their systems and control costs, according to an ET report.However, the scale of the opportunity will depend on how effectively IT service providers adjust their offerings and turn AI demand into sustained revenue growth. OpenAI's lower-than-previously-indicated revenue run rate could also ease concerns that the rapid expansion of AI companies poses a major threat to traditional IT services.Meanwhile, the US-listed American Depositary Receipts (ADRs) of Infosys and Wipro recovered from their intraday lows overnight, finishing the session flat to positive.(Disclaimer: Recommendations and views on the stock market, or any other asset classes or personal finance management tips given by experts and analysts are their own. These opinions do not represent the views of The Times of India.)You use AI every day. Now get your AI Quotient. Take the AIQ test.