IT Stocks Sink as Accenture Outlook Cut Triggers Sharp Sell-Off in Sector

Mumbai: Indian IT stocks witnessed heavy selling on Friday, dragging the Nifty IT index down more than 6 per cent after global technology services giant Accenture lowered its revenue growth forecast and warned of a challenging demand environment.

The Nifty IT index plunged as much as 1,831 points, or 6.43 per cent, to touch an intraday low of 26,634.50, emerging as the worst-performing sectoral index in early trade. Later in the session, the index remained under pressure, trading nearly 5 per cent lower.

The decline was led by Infosys, which dropped over 7 per cent. Shares of Tata Consultancy Services (TCS) fell around 5.6 per cent, while Mphasis lost more than 5 per cent.

Other major technology stocks also came under pressure. Persistent Systems declined nearly 5 per cent, while LTIMindtree slipped over 4 per cent. Tech Mahindra and HCLTech each fell about 4.5 per cent. Coforge and Wipro also registered notable losses.

Weakness extended beyond large-cap IT counters, with mid-cap technology stocks such as KPIT Technologies, Tata Elxsi, Hexaware Technologies and LT Technology Services among the major losers on the BSE Midcap index.

Market sentiment deteriorated after Accenture slashed its FY26 revenue growth guidance, raising concerns about a slower recovery in global technology spending. The announcement triggered a sharp decline in Accenture's shares overnight and weighed heavily on the American Depositary Receipts (ADRs) of Indian IT companies.

Accenture shares tumbled nearly 18 per cent in US trading, while Infosys ADRs dropped around 10 per cent and Wipro ADRs fell more than 3 per cent.

Analysts said the guidance cut has renewed fears about demand softness and reduced client spending, prompting investors to reassess earnings expectations for Indian IT firms. They added that pressure on the sector could continue if earnings estimates are revised downward in the coming quarters.

Despite the sharp correction, some market experts believe valuations of Indian IT companies are gradually becoming more attractive, which could encourage buying interest at lower levels.

Accenture reported third-quarter revenue of $18.7 billion but lowered its full-year growth outlook amid ongoing uncertainty in client spending patterns and revenue challenges linked to geopolitical developments in West Asia. The company also reported weaker new bookings compared to the previous year.

The latest sell-off comes on the heels of recent concerns over the US Federal Reserve's indication that interest rates may remain elevated for longer, a factor that has already weighed on global technology stocks.

Over the past year, the Nifty IT index has fallen nearly 30 per cent from its peak level of around 38,600. The broader market also remained under pressure on Friday morning, with the Sensex losing more than 700 points and the Nifty slipping below the 24,000 mark.

With inputs from IANS

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