INDIAN IT STOCKS FALL AS ACCENTURE CUTS REVENUE FORECAST

Shares of major Indian information technology companies declined on Friday following Accenture's downward revision of its revenue guidance. Tata Consultancy Services fell more than 5%, whilst Infosys dropped over 7% and Tech Mahindra declined over 4%. The Nifty IT Index, a benchmark for the sector, slid more than 5%. Accenture reduced its revenue growth forecast for the financial year ending August 2026 to between 3% and 4%, from a previous range of 4% to 5%.

Accenture CEO Julie Sweet attributed the company's revised guidance partly to operational challenges, noting that third-quarter results missed revenue consensus by $90 million, with a $100 million impact from the Middle East. Global brokerage Citi stated on Thursday that it maintains a cautious outlook on Indian IT stocks, citing concerns including artificial intelligence disruption, heightened competitive pressure and global capability centre trends. Citi noted the Nifty IT index trades at around 16 times one-year forward earnings, compared with Accenture at 10 times.

The broader context suggests Indian software firms face mounting headwinds as macroeconomic uncertainty compounds existing sector challenges. According to reporting, the Indian IT sector has shed nearly 30% of its market value during the current year. Citi's assessment indicates these near-term obstacles are expected to persist given the combination of technological disruption and economic volatility affecting the industry outlook.