Indian IT stocks rebound after Accenture growth warning fuels selloff

Shares of IT companies including Infosys, Tech Mahindra, Coforge and others rebounded on Monday, after the stocks hit fresh record lows on Friday when Accenture’s guidance cut spooked investors.The Nifty IT index gained 1.3% to 27,785 on Monday, as seen at 10:10 am. Coforge, OFSS, Tech Mahindra and Persistent Systems shares gained 2-3%, while those of Infosys, LTI Mindtree, HCL Tech, Mphasis, Wipro and Tata Consultancy Services (TCS) rose around 1% each.This comes a session after the sectoral index plunged to 26,634.50 on Friday, the lowest level seen by the sectoral index since April 2023. Accenture last week revised its FY26 revenue growth guidance to 3-4%, compared with its earlier outlook of 3-5%. The company also projected fourth-quarter revenue of $17.75-18.4 billion, falling below Street expectations of $18.47 billion, according to LSEG data.Accenture’s softer outlook retriggered worries that enterprises remain cautious on discretionary spending related to IT consulting and digital transformation projects, even as investments in artificial intelligence and cybersecurity continue. Indian IT companies derive a major portion of their revenue from the US economy. Hence, worries around reduced discretionary spending may have led to the sharp sell-off in the stocks on Dalal Street on Friday.Also read: Why Accenture's warning sparked a Rs 1.35 lakh crore meltdown for TCS, Infosys, other IT stocksAnalysts highlight attractive IT valuationsHowever, analysts were quick to point out attractive valuations. Buying in IT stocks can emerge at lower levels since valuations are becoming attractive after the sharp correction, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.Nuvama in its note also said that the stock price reaction on Friday appeared highly exaggerated, although Accenture’s guidance cut and soft bookings are slightly negative for Indian IT. "We continue to maintain that Gen AI will eventually lead to expansion of TAM for Indian IT companies. Additionally, post the recent sharp correction, sector valuations have become highly attractive," it added.Also read: Down 30% in 1 year, are AI-hit Infy, TCS still value stocks?Technical view on Nifty ITPabitro Mukherjee, Deputy Vice President of Technical Research at Bajaj Broking, warned that volatility in IT stocks is likely to be high in the coming sessions ahead of the quarterly results season. Price-wise, there is still no sign of reversal of the corrective trend; hence he suggested avoiding the sector at current levels. "Let the price stabilise and only a formation of higher high and higher low on the weekly chart and a move above the 50-day EMA, currently placed around 29,325, will be the initial sign of trend reversal," he said.Mukherjee expects the Nifty IT index to find immediate key support at 26,180 levels, being the identical lows of CY22 and CY23."The index continues to trade below its key short- and long-term moving averages, while the RSI has slipped below 40, indicating bearish momentum. Additionally, DI- has crossed above DI+ on the ADX indicator, reflecting growing seller dominance. The 27,050–27,000 zone remains a crucial support zone. Any sustainable move below this zone can lead the index to extend its weakness further on the downside. The resistance is placed in the 28,250–28,300 zone," said Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities.Also read: Sudeep Shah picks 8 stocks, outlines Infosys, IFCI strategy(With inputs from agencies)(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Indian tech stocks experienced a sharp decline Friday, mirroring a significant drop in global IT giant Accenture due to weaker-than-expected revenue and order forecasts. The Nifty IT index plunged over 6%, with major players like Infosys and TCS seeing substantial losses. Analysts suggest valuations are now attractive but future growth remains uncertain amid AI advancements, advising caution for investors.

New Delhi: Indian information technology (IT) stocks witnessed sharp selling after weak guidance from Accenture raised fresh concerns about growth in the sector.The cautious outlook from the global consulting company affected market sentiment and led to selling across both large-cap and mid-cap IT shares.Analysts said investors are becoming worried about slower business growth and weak demand in global markets.Sensex Declines 831 Points, Nifty Slips Nearly 1% As Accenture's Weak Guidance Triggers IT Sell-OffLarge IT Companies See Sharp FallAmong large IT firms, Tata Consultancy Services (TCS) has fallen nearly 55 percent from its record high of Rs 4,592.Wipro is down 52 percent , while LTIMindtree has declined 50 percent from its peak.Infosys has also dropped 48 percent , showing weakness across major technology companies.Mid-Cap IT Stocks Hit HarderMid-cap IT stocks have seen even deeper corrections compared with large-cap companies.Happiest Minds Technologies has emerged as the worst performer, falling around 78 percent from its all-time high.Sensex Falls 479 Points To 76,010, Nifty Slips Below 23,950 Amid IT And Banking WeaknessNewgen Software has dropped 74 percent , while Sonata Software is down 66 percent .Other IT firms such as Birlasoft, Tata Elxsi and KPIT Technologies have also declined by more than 60 percent .Why Sector Is Under Pressure?Market experts said uncertainty over global growth, geopolitical tensions and higher US interest rates are hurting technology spending.Higher borrowing costs are increasing recession fears in the US, which remains the biggest market for Indian IT companies.US Market Remains KeyIndia’s IT sector is valued at nearly Rs 26 lakh crore, with about 57 percent of revenue coming from the US market.Analysts believe IT stocks may remain volatile until demand improves and companies provide stronger growth guidance.

Indian IT stocks witnessed a sharp selloff on Friday after global consulting giant Accenture issued a cautious business outlook, triggering widespread concern across technology counters. The announcement led to a massive erosion of investor wealth, wiping out nearly ₹2 lakh crore in market capitalisation at the opening of trade and pulling the entire IT sector lower.Leading Indian IT companies including Tata Consultancy Services (TCS), Infosys, HCLTech, Tech Mahindra, and Wipro declined between 3.3% and 6%. The pressure was not limited to large-cap names, as mid-tier IT firms such as Coforge, Hexaware Technologies, Sonata Software, Tata Elxsi, and KPIT Technologies also saw steep declines. In fact, all top 15 losers on the Nifty 500 index in early trade belonged to the IT sector.Sensex Declines 831 Points, Nifty Slips Nearly 1% As Accenture's Weak Guidance Triggers IT Sell-Off The broader impact was reflected in the Sensex-listed companies, where market capitalisation dropped by nearly ₹2 lakh crore within minutes. Investor sentiment weakened significantly as concerns grew that Accenture’s outlook could signal similar demand challenges for Indian IT exporters in upcoming quarters.Accenture reported a 6% year-on-year rise in revenue to $18.72 billion, but markets focused on its forward guidance. The company narrowed its full-year revenue growth forecast to 3–4%, compared to an earlier estimate of 3–5%. Management also highlighted that client budgets are not expanding despite rising interest in artificial intelligence. Instead, companies are reallocating existing IT budgets toward AI projects rather than increasing overall spending.The company also forecast weaker-than-expected revenue for the fourth quarter and flagged geopolitical disruptions in the Middle East that had already impacted business. Additionally, outsourcing bookings fell 15% year-on-year, raising concerns since outsourcing remains a core revenue driver for Indian IT firms.Global markets mirrored the weakness, with Accenture shares plunging nearly 15% on Wall Street. ADRs of Infosys, Wipro, and Cognizant also fell sharply, while IBM and Capgemini declined significantly.Brokerages turned cautious, noting that valuation multiples leave limited room for disappointment if demand remains weak. Analysts warned that Indian IT firms may need to increasingly rely on smaller AI-led deals as global discretionary spending continues to remain subdued.

Shares of major Indian IT companies fall up to 7% after global sector leader Accenture cuts its revenue guidance.

Shares of Indian software firms tumbled on Friday, joining a global selloff in tech stocks after Accenture Plc forecast slower revenue growth, deepening concerns over a sector that has shed nearly 30% of its market value this year.