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- Stocks of major Indian information technology companies fell as much as 7% on Friday.
- Infosys led sector declines as the Nifty IT index dropped more than 5%.
- Citi warned AI disruption and economic uncertainty could pressure growth.
Pedestrians walk past a digital broadcast displaying share prices on the facade of Bombay Stock Exchange (BSE) on the day of India’s general election result in Mumbai on June 4, 2024. Punit Paranjpe | Afp | Getty Images
Stocks of major Indian information technology companies fell as much as 7% on Friday after global professional service giant Accenture lowered its revenue guidance, souring sentiment toward the sector.
Shares of India’s largest IT company, Tata Consultancy Services, were down over 5%. Infosys dropped more than 7% while Tech Mahindra declined over 4%. The benchmark Nifty IT Index slid more than 5%.
Accenture on Thursday cut its revenue growth guidance for the financial year ending August 2026 to between 3% and 4% from its previous forecast of 4% to 5%.
“On the revenue side, we missed revenue consensus by $90 million, and we had a $100 million impact from the Middle East,” Accenture CEO Julie Sweet told CNBC’s Squawk on the Street on Thursday, discussing the company’s third-quarter results.
watch nowVIDEO06:01Accenture CEO Julie Sweet on Q3 results: Lowered guidance due to Middle East impactSquawk on the Street
Global brokerage Citi said Thursday it remains cautious on the Indian IT sector, noting that the Nifty IT index trades around 16 times one-year forward earnings, while Accenture trades at 10 times.
“We have been cautious given AI disruption, increased competitive intensity, GCC trends, etc.; the macro uncertainty increases the challenges near term,” as per Citi’s note.
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