- Tata Consultancy Services, Infosys, HCL, and Coforge shares recovered on June 22 after a sell-off
- Coforge shares rose 2.85%, Oracle Financial Software 2.09%, Infosys gained 1.95% intraday
- Wipro shares declined 0.88%, while TCS, HCL, and Mphasis rose over 1% on the same day
IT stocks such as Tata Consultancy Services, Infosys, HCL Technologies, Corforge recovered during the trading hours on Monday, June 22 after a sharp sell-off in the previous session as Accenture's weaker-than-expected guidance raised concerns around the outlook for Indian tech companies.
The rally was led by Coforge, with the shares rising 2.85% intraday to Rs 1,505 apiece, followed by Oracle Financial Services Software, with a 2.09% surge at Rs 9,840 per share, while Infosys gained 1.95% trading at Rs 1.071.9. Shares of TCS, HCL Technologies and Mphasis rose over 1% to trade at Rs 2,157, Rs 1,148.7 and Rs 2,307.1 respectively. Among the major IT stocks, on Wipro remained in red, down 0.88% at Rs 182.4.
The recent surge in major IT stocks comes after a sharp selloff on Friday, June 19, with Infosys shares falling over 8% to Rs 1,033.9. Mphasis touched Rs 2,150, marking a 7.99% drop, while Persistent Systems Ltd traded at Rs 4,602, down 6.85%, and TCS fell to Rs 2,059.9, down 6.51%.
Why Are IT Stocks Rising?
According to Harshal Dasani, Business Head at INVasset PMS, "the rally in Indian IT stocks has been technical, driven by extreme short-term oversold conditions after the Accenture-led sell-off, position covering by funds that had run heavy underweights, and the typical post-correction sentiment reversal that follows any sharp drawdown."
Accenture Cuts Revenue Outlook
On Thursday, June 18, Accenture cut its revenue outlook for the current quarter, 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.
According to brokerages, the forecast from Accenture's management indicates that the demand environment remains challenging, with clients continuing to delay discretionary spending decisions. Morgan Stanley noted that the IT giant Accenture's results signal a “tough macro climate” that could continue into the second quarter. There is a concern that uncertainty could spill over into the coming quarters and likely impact FY27 guidance from Indian IT firms, it stated.
Meanwhile, HSBC said that the weakness seems to be led more by geopolitical issued than concerns around AI-led productivity gains. It noted that Indian IT companies continue to lack meaningful near-term catalysts, although sector valuations are now approaching trough levels.
As per Jefferies, Accenture's revised revenue outlook could result in consensus estimate cuts across the IT sector. The brokerage says that the traditional IT services growth remains under pressure, reflecting that India's top five IT companies continue to trade at a significant premium to Accenture.
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