Infosys announced it will pay fresh graduates as much as ₹21 lakh per year for specialized tech roles, sparking a sell‑off in Indian IT stocks.
What Happened
On Dec 26, Infosys said entry‑level salaries for certain technology positions could reach ₹21 lakh annually.
Impact on the Market
The news pushed the Nifty IT index down about 0.86% to 38,639, extending losses for a third straight session. Most major IT stocks slipped, while Infosys, Wipro and Persistent Systems managed small gains.
Why the Drop?
Analysts say the higher pay reflects fierce competition for talent in AI, cloud and advanced engineering. While firms need skilled workers, rising salaries add to operating costs.
- Companies must balance higher wages with profit margins.
- Revenue growth in some IT segments is slowing.
- Investors watch whether firms can keep margins while paying more.
Analyst Views
One analyst notes overall salary growth in the sector is moderating, even as pay for niche skills rises. He expects the market to focus on how well companies control talent costs and maintain strong deal pipelines.
Another expert believes the hikes won’t significantly shift stock valuations. He points to global demand—especially from the U.S.—and earnings outlook as the main drivers for IT shares.
What to Watch Next
Key factors for investors include:
- Deal wins and pipeline strength.
- Margin trends as payroll costs rise.
- Global demand for IT services, particularly AI projects.
- Any further changes in U.S. visa rules that affect talent flow.
In short, while the salary increase signals tighter talent competition, the broader market will likely react more to earnings, margins, and overseas demand.
Disclaimer
Remember, this is my perspective, not a prediction. Do your own research before making any investment decisions.