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India's IT companies gained 4% on Monday following better-than-expected results from Wipro and HCLTech, signalling stability in demand.

Wipro's shares rose 13.7% to their highest since April 2022, and were on track for their best day since July 2020. HCLTech shares rose over 5% to a record high.

The 10-member Nifty IT index climbed 4% to a nearly two-year high, powering the benchmark Nifty 50 index to a fresh record high.

"There are some signs showing that the decrease in revenue or slower growth many companies faced might start to improve in the next few quarters," said Apurva Prasad, vice president of institutional research at HDFC Securities.

Market leader Tata Consultancy Services and second-ranked Infosys also reported better-than-expected third-quarter revenue on Friday, indicating that the overall demand situation had not deteriorated further.

Last year, Indian IT companies struggled as clients favoured cost-oriented deals over growth-oriented ones.

HCLTech logged its highest third-quarter revenue growth since the corresponding period in 2021.

The company, however, narrowed its fiscal 2024 revenue forecast in dollar terms on a constant currency basis to 5-5.5% from 5-6% previously.

"HCLTech's revised guidance suggests a positive end to fiscal 2024, with expectations of outperforming competitors in the upcoming fiscal year, 2025," Prasad added.

"We are seeing a certain form of stabilization, and in some ways, some pickup in discretionary spend," Wipro CEO Thierry Delaporte said in a post-earnings media conference on Friday.

Wipro is starting to see early signs of growth in its consulting vertical, led by double-digit sequential growth in order bookings at Capco, a firm it acquired in 2021.

Consulting "possibly raises hopes for growth normalisation in fiscal 2025," Emkay Global analysts said.

HCLTech's 41% jump in 2023 was the highest among the top five IT companies, and outperformed the IT index's 24% climb