Tech stocks are under pressure after Accenture narrowed down the guidance and reported lower order booking for the next quarter. Shares of major Indian IT players like Tata Consultancy Services (TCS), Infosys, and HCL Tech are all down 2% each after Accenture’s 7% cut overnight. This is after Accenture highlighted that clients, especially in the public sector, are reviewing and cutting government-related IT spending in US.
Accenture’s results are often viewed as a barometer for the broader IT sector, setting the stage for what is to come. With the Indian IT earnings season kicking off in April, this will be keenly watched whether domestic firm navigate these same headwinds. Accenture raised the lower end of its forecast to 5-7% from the earlier 4-7%. Although, this indicates a steady demand for IT services, it also in a way indicates persistent challenges in the macroeconomics landscape.
Accenture Guidance: How this affects Indian IT stocks
Unlike Accenture, Indian IT giants do not have direct exposure to US federal government contracts. However, rising macroeconomic uncertainty may still impact client spending, particularly in banking, capital markets, and other key sectors.
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Indian IT companies have been banking on the artificial intelligence (AI) boom, but the pace of AI-driven transformation remains gradual. Accenture reported that its generative AI (GenAI) bookings touched $2.6 billion in the first half of FY25, nearly reaching last year’s total of $3 billion.
What are brokerages expecting on tech stocks? Nuvama of IT stocks
According to the brokerage firm Nuvama, “Accenture upgraded the lower end of its FY25 revenue growth guidance to 5–7% from 4–7% YoY (CC), with an inorganic contribution of slightly more than 3%. Management alluded to an elevated level of uncertainty over the past few weeks, especially in public services, due to review and cuts of government spending.”
The brokerage also noted that Accenture’s headcount increased by about 2,000 employees, with its data and AI workforce now at 72,000, approaching its FY25 target of 80,000. In addition to this, the firm has already invested over $500 million across 11 acquisitions in the first half of FY25, with a full-year target of $2-3 billion in investments.
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