- Accenture’s weaker revenue guidance triggered a sell-off in Indian IT stocks globally and domestically
- Infosys, Mphasis, Tech Mahindra, TCS, and others saw share prices fall between 2.89% and 8.3% on Friday
- Brokerages cited ongoing client delays in discretionary spending amid a challenging macroeconomic environment
IT stocks across the board are seeing red after Accenture's weaker-than-expected guidance intensified concerns around the outlook for Indian tech companies.
The global consulting and technology services giant has cut its revenue outlook for the current quarter, disappointing investors despite reporting healthy profitability. The stock slumped 19% in US trading on Thursday, triggering a sell-off in the American depositary receipts of Indian IT majors such as Infosys and Wipro.
Back home on Friday, major Indian IT stocks are crashing. Infosys Ltd. is trading at a low of Rs 1,033.9, down 8.3%. Mphasis Ltd. touched Rs 2,150, declining 7.99%, while Tech Mahindra Ltd. fell to Rs 1,344, down 7.16%.
Persistent Systems Ltd. is trading at Rs 4,602, down 6.85%, and Tata Consultancy Services Ltd. (TCS) slipped to Rs 2,059.9, down 6.51%.
HCL Technologies Ltd. hit Rs 1,091.4, falling 6.06%, while Coforge Ltd. touched Rs 1,397.8, down 5.75%. Wipro Ltd. is trading at Rs 174.89, down 4.35%, and Oracle Financial Services Software Ltd. fell to Rs 9,127.5, down 2.89%.
Brokerages had said the commentary from Accenture's management suggests that the demand environment remains challenging, with clients continuing to delay discretionary spending decisions.
Morgan Stanley said Accenture's results point to a “tough macro climate” that could persist into the second quarter. Morgan Stanley believes there is a risk that uncertainty could spill over into the coming quarters and potentially affect FY27 guidance from Indian IT firms.
HSBC noted that the weakness appears to be driven more by geopolitical disruptions than concerns around AI-led productivity gains. HSBC added that Indian IT companies continue to lack meaningful near-term catalysts, although sector valuations are now approaching trough levels.
Jefferies warned that Accenture's revised revenue outlook could lead to cuts in consensus estimates across the IT sector. According to Jefferies, traditional IT services growth remains under pressure, highlighting that India's top five IT companies continue to trade at a significant premium to Accenture.
Kotak Institutional Equities said Accenture's results offered “no solace” for a sector already grappling with multiple headwinds. Among large-cap Indian IT firms, Kotak believes Infosys could be relatively more vulnerable to the indirect impact of slowing discretionary spending and weakness in product-oriented verticals.
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