Nifty IT Crash: Infosys Emerges Top Laggard, Down 7.5% After Accenture Guidance

IT Stocks: The IT stocks listed in Indian stock market exchanges came under heavy selling pressure after global tech services major Accenture trimmed the upper end of its annual revenue growth forecast and issued a weaker-than-expected outlook, triggering concerns about demand trends across the IT sector at large.

Nifty IT index crashed 6.5% as against a 1% fall in the benchmark Nifty 50.

Among the top losers, Infosys was the top laggard, trading 7.5% lower, after Mphasis, Tech Mahindra, Persistent Systems and TCS, all declining over 6% each.

Meanwhile, HCL Tech, Coforge, LTM tanked over 5% each, and Wipro and L&T Tech were down 4% and 2%, respectively.

The negative sentiment spilled over from global technology stocks.

On the New York Stock Exchange (NYSE), the American Depository Receipts (ADRs) of Infosys and Wipro fell as much as 10% on Thursday after Accenture's new guidance. The shares of Cognizant shredded over 10%, IBM declined over 5%, and Capgemini closed the session down 8.9%.

Accenture shares itself nosedived over 17% after the company released its quarterly earnings and updated guidance, triggering a broad-based selloff across IT services and consulting companies worldwide.

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Why Accenture Cut Revenue Growth Forecast

Accenture now expects annual revenue growth of 3% to 4% in constant currency terms, as against its earlier forecast of 3% to 5%.

Apart from the nearly 1% impact from its US federal business, the company expects revenue growth of 4% to 5%, lower than its previous outlook of 4% to 6%.

In Q4, Accenture projected revenue in the range of $17.75 billion to $18.4 billion, below analysts' average estimate of $18.47 billion, according to data compiled by LSEG.

The consulting giant also disclosed that the conflict in the Middle East resulted in a $400 million impact on its regional business during the third quarter and warned that there could be "more impact in the fourth."

Third-quarter new bookings declined about 2% year-on-year to $19.3 billion. Revenue rose 6% to $18.72 billion but fell short of analyst estimates of $18.75 billion.

Accenture's third-quarter revenue increased 6% but narrowly missed market expectations, according to a Reuters report.

AI Investment Focus

Despite the cautious outlook, Accenture highlighted continued strength in large transformation projects and announced plans to significantly increase investments through acquisitions.

The company said it intends to spend $9 billion on acquisitions this year, up sharply from $5 billion previously, as it strengthens capabilities in artificial intelligence, cloud computing and data services. These areas continue to attract client spending, particularly for projects focused on cost optimisation and business growth.

Accenture CEO Julie Sweet said, "Accenture delivered a strong third quarter, with broad-based revenue growth, a 9% increase in EPS, and $8.2 billion returned to shareholders year-to-date. Demand for large-scale reinvention remains strong — 104 quarterly client bookings of $100 million or more year-to-date, up 13% — and we are seeing more large-scale AI transformation programs, while executing our strategy to capture new areas of growth," citing media reports.

"Our agreement to acquire a majority stake in Dragos and all of runZero and NetRise, leaders in OT Security, is the type of move that defines our strategy: it is expanding our addressable market, creating a new platform-led growth opportunity, and is positioning Accenture at the center of one of the most critical cybersecurity challenges our clients face," she said.