Indian IT stocks tumble 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 slumped 5.6 per cent on Friday after industry bellwether Accenture forecast quarterly sales below Wall Street view and lowered the upper end of its annual revenue outlook due to weakness in its Middle East business.
Shares of Indian IT companies, including Tata Consultancy Services, Infosys, and HCL Tech fell between 5 per cent and 8 per cent.
India’s $315 billion IT sector has faced investor concerns that AI could disrupt its traditional, labour-intensive business model.
Analysts expect a negative read-through for India’s IT companies, with Morgan Stanley saying that investors projected a weaker-than-usual start to the 2027 fiscal year but remained optimistic about an improvement in the second 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,” analysts at Morgan Stanley said.
Goldman Sachs analysts projected a negative read-across for Indian IT companies, given “continued low visibility on demand outlook”.
Broader macroeconomic headwinds are also impacting business visibility for IT companies, as clients adopt a cautious approach toward technology investments and hold off on non-essential tech spends.
Source: Reuters
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