Infosys shares fall 5% in 5 sessions; should you buy, sell or hold?

As per the latest business developments, Infosys shares continued their downward slide on Tuesday, falling 1.07 percent to settle at Rs 1,027.40 per share on the NSE.

The stock has declined around 5 percent during the past five trading sessions.

The decline came amid a broader slide in IT stocks. The Nifty IT index declined up to 1 percent, with brokerage CLSA flagging subdued demand as a risk to the sector's medium-term earnings outlook.

"IT firms' management demand commentary going into the silent period for September quarter results stays wary at best," CLSA stated, adding that "weak macro fundamentals due to geopolitics, elevated rates and inflation pose downside risk to earnings."

Prasenjit Paul, Fund Manager at 129 Wealth & Research and Market observer at Paul Asset, stated the firm has maintained a bearish view on large-cap IT stocks since early 2026, as artificial intelligence is changing the traditional IT-services model faster than anticipated.

"Infosys itself says it is accelerating investments in AI, talent and platforms, while Q1 FY27 margin was still healthy at 21.1 percent. These investments can keep near-term expansion and margin expansion under pressure," Paul stated.

"The fundamental outlook is not positive. Technically additionally, the structure stays weak, with the stock around Rs 1,040 versus its 200-DMA near Rs 1,289," he stated.

Paul stated a short-term relief surge could be anticipated, but further noted that until the stock crosses and sustains above its 200-DMA, market participants should avoid the stock, while existing market participants can use short-term rallies to reduce exposure.

In the meantime, CLSA stated weak macroeconomic fundamentals, impacted by geopolitics, elevated rates and inflation, have kept discretionary demand muted, implying more earnings-per-share downside risk, particularly for Infosys and Wipro.

"TCS too maintained a wary stance while HCL's demand commentary remained the most resilient," the brokerage stated.

CLSA, that stated, stated order books and employee headcount are anticipated to stay largely stable, reducing the risk of extreme negative repercussions from AI rollouts on renewed deals and IT jobs.

The brokerage additionally stated the banking, financial services and insurance (BFSI) vertical keeps see resilient demand.