Tale of the Tape 

Good evening ya’ll!

Markets finally closed with decent gains after back to back days of flattish moves, with the Nifty and Sensex up +0.4% each. Let’s not jinx it and pray for a 25k finish for the Nifty this week. Midcaps (+0.2%) and Smallcaps (+0.3%) barely ended in the green. The advance-decline ratio was evenly split.

It was a mix of red and green across sectors. IT stocks (+2.8%) mainly powered today’s rally, followed by Pharma (+0.9%). Oil & Gas (-0.3%) and Real Estate (-0.3%) saw minor cuts.

In today’s issue of the Daily Rip, we break down the medium-term triggers for the IT sector, analyse Urban Company’s upcoming Rs 1,900-cr IPO, look at the biggest newsmakers of the day and more.

Honourable Mentions:

Kotak Mahindra Bank was in focus after CNBC reported that Sumitomo may sell its entire 1.7% stake worth over Rs 6,000 cr. Railtel gained +6% after bagging multiple orders worth Rs 396 cr from the Bihar govt.

Check out the NSE 500 heatmap:

Stock
IT Stocks: Dead Or Alive?

The Nifty IT Index is down -19% YTD and is the worst-performing sector of 2025! What are the reasons behind this underperformance and should you buy the dip or avoid it? Here’s what you need to know.

Recap time: ICYMI, the industry has been in trouble for over a year now. In Q1FY26, most Tier 1 companies reported negative revenue growth and barely managed to hold onto margins. Going forward, there are a few triggers that you must be aware of: 

1) Tough legislation: The US Senate has proposed a new law (the HIRE Act) that will slap a 25% tax on all payments US companies make to foreign persons for services. It also bans tax deductions on these outsourcing payments. This will force Indian IT firms to either absorb the hit, reduce pricing or ramp up local hiring -- bigger expenses either way. PS - experts say it’s unlikely the bill will be passed in its current form. We also don’t know how much support the Trump administration will give it, but the India-US relationship is at a tipping point.

2) Share buybacks: IT stocks saw a bump today after Infosys announced its first buyback in three years. Analysts say it could spend up to Rs 14,000 cr; historically the buyback price has been at a premium of 18%-25% premium to current levels so it’s great for shareholders. PS - this follows TCS’s big buyback in 2024 and experts say this could trigger more from other firms. But do you really want your IT company spending precious capital on buyback instead of investing in AI and future growth?

3) US uncertainty: Tariffs don’t affect Indian IT directly, but it makes their clients hesitant to spend. This is what’s held back a revival in 2025 so far. With trade deals being signed, a Fed rate cut later this month, we could start seeing demand stabilise. But there’s no telling with Trump.

Specials
3 Smallcaps On Traders’ Radar

Wondering what stocks the pros are tracking? In our latest video, we reveal three smallcaps stocks that SEBI RAs have recently added to their Stocktwits watchlist. PS - stay tuned till the end for a bonus pick!