India’s Nifty IT index at three-year low as bellwether Accenture flags weak outlook
FILE PHOTO: Figurines with computers and smartphones are seen in front of Accenture logo in this illustration taken, February 19, 2024. REUTERS/Dado Ruvic/Illustration/File Photo
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BENGALURU, June 19 : India’s Nifty IT index fell to a three-year low on Friday after bellwether Accenture forecast quarterly sales below Wall Street view, cut its annual revenue outlook and reported softer bookings in its managed services business.
Shares of Indian IT companies, including TCS, Infosys, and HCLTech fell 4 per cent to 8 per cent after Accenture flagged deal delays and a $400 million hit to its Middle East business from the Iran conflict.
India’s $315 billion IT sector faces concerns that AI could disrupt its labour-intensive model, while geopolitical and economic uncertainty weighs on demand as clients defer non-essential tech spending.
Analysts see a negative read-through for Indian IT, with Morgan Stanley saying investors had already priced in a weak start to fiscal 2027 but expect an improvement in the September quarter.
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“However, with this commentary from Accenture, we think hopes of any meaningful improvement in growth in 2Q could start fading away,” the note said.
Indian IT firms have limited direct exposure to the Middle East, said Pritesh Thakkar, equity analyst at PL Capital, but face indirect risks from delay in deal closures, slower project ramp-ups and prolonged decision cycles.
Accenture’s forecast follows hawkish U.S. Federal Reserve commentary that has fuelled expectations of a September rate hike. Higher rates could dampen appetite for emerging markets and weigh on overseas spending, a risk for Indian IT firms with significant U.S. exposure.
Mayuresh Joshi, head of equity research at investment advisory firm William O’Neil & Co, told Reuters that the market is looking for growth, which is “clearly missing”, even though existing order books support current revenues.
“In terms of what these hyperscalers and platform companies are doing and implementing across enterprise value chains, they’ll (Indian IT companies) have to get their act together very fast, both in terms of organic and inorganic.”
India’s IT stocks have slid about 29 per cent so far this year, making them the worst-performing sector, versus an 8.3 per cent drop in the benchmark Nifty 50.
Source: Reuters
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