- TCS has fallen nearly 55% from its record high but is the 10th-worst performer among tech stocks
- Several mid-cap IT firms trade significantly below pandemic-era highs, with Happiest Minds down 78%
- Large-cap IT names like Wipro, LTIMindtree, and Infosys have also declined by nearly half from peaks
The latest selloff in IT stocks following Accenture's cautious outlook has put the spotlight back on the sector's prolonged correction. While Tata Consultancy Services has fallen nearly 55% from its record high, the country's largest IT services company is only the 10th-worst performer among a basket of major technology stocks when measured from peak levels.
Data shows that several mid-cap IT companies remain significantly below their pandemic-era highs. Happiest Minds tops the list, trading about 78% below its all-time high, followed by Newgen Software at 74% and Sonata Software at 66%.
Among other notable laggards, Birlasoft, Tata Elxsi and KPIT Technologies are down more than 60% from their respective peaks. Nucleus Software, Mastek and Zensar Technologies have also seen their shares halve from record levels.
The correction has not spared large-cap names either. TCS is down 55% from its high of Rs 4,592, while Wipro has declined 52%, LTIMindtree 50% and Infosys 48%.
Accenture's weaker-than-expected guidance had intensified concerns around the outlook for Indian IT companies, with multiple brokerages warning that demand uncertainty and geopolitical disruptions could continue to weigh on growth over the coming quarters.
The global consulting and technology services giant cut its revenue outlook for the current quarter, disappointing investors despite reporting healthy profitability.
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.
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. 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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