Indian IT stocks slump up to 7% as Accenture cuts revenue outlook, fueling fresh concerns over sector growth
Pedestrians pass by a digital publication showing share prices on the facade of the Bombay Stock Exchange (BSE) as India’s general election results were announced in Mumbai on June 4, 2024.
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Shares of leading Indian information technology companies fell as much as 7% on Friday after global professional services giant Accenture cut its revenue forecast, hurting confidence in the sector.
Shares of India’s largest IT company Tata Consultancy ServicesIt lost over 5%. infosys fell more than 7 percent Technology Mahindra It decreased by more than 4 percent. The benchmark Nifty IT Index lost more than 5%.
Accenture on thursday cut revenue growth For the fiscal year ending August 2026, the expectation is to rise to between 3% and 4%, from the previous forecast of 4% to 5%%.
“On the revenue side, we missed revenue reconciliation by $90 million and had a $100 million impact from the Middle East,” Accenture CEO Julie Sweet told CNBC’s Squawk on the Street on Thursday while discussing the company’s third-quarter results.
Global broker Citi on Thursday said it remains cautious on the Indian IT sector, noting that the Nifty IT index is trading at around 16 times one-year forward earnings, while Accenture is trading at 10 times.
“We have remained cautious given AI disruption, increasing competitive intensity, Gulf Cooperation Council trends, etc., with macro uncertainty compounding challenges in the near term,” Citi noted.
