Indian IT Stocks Decline Following Accenture Q2 Results

Market Performance

Shares of major Indian IT companies, including Infosys, Wipro, Tata Consultancy Services (TCS), and HCL Technologies, witnessed declines of up to 3% following the release of Accenture's Q2 earnings report.

• Infosys: Declined 3.09% to ₹1,564.15
• TCS: Dropped 2.7% to ₹3,466.60
• Wipro: Fell 2.85% to ₹260.30
• HCL Technologies: Decreased 2.53% to ₹1,521.20

Additionally, the American Depository Receipts (ADR) of Infosys and Wipro experienced losses on the New York Stock Exchange (NYSE):

• Infosys ADR: Dropped 3.5% to $17.9
• Wipro ADR: Declined 3.2% to $2.79

Accenture Q2 Results

Accenture reported its earnings for the second quarter, ending February 2025. Key financial highlights include:

• Revenue: Increased by 5% year-on-year to $16.7 billion, aligning with the company's guidance of $16.2 billion to $16.8 billion.
• Full-Year Revenue Outlook: Adjusted to a 5-7% growth range, compared to the earlier 4-7% forecast.
• Projected Q3 Revenue: Expected between $16.9 billion to $17.5 billion.
• Gross Margin: Reported 29.9%, compared to 30.9% in the previous year.
• New Bookings: Reached $20.9 billion, slightly below market expectations.
  • Consulting Bookings: $10.5 billion
  • Managed Services: $10.4 billion

Impact on Indian IT Stocks

Indian IT companies generate a substantial portion of their U.S. business from Accenture, leading to market reactions following its Q2 results. The company's outlook on discretionary spending and deal bookings raised concerns about future growth momentum.

Industry experts suggest that while large-scale transformation programs continue, discretionary spending remains constrained. The demand environment remains stable, but clients focus on cost efficiency and business reinvention.

Market Sentiment

The decline in Indian IT stocks follows broader global uncertainties and potential risks to earnings growth. Although some segments, like Managed Services, performed well, volatility in client spending patterns and macroeconomic conditions could impact near-term performance.

Conclusion

The correction in Indian IT stocks reflects market concerns regarding the sector's growth sustainability. While Accenture's results provide some optimism with stable revenue guidance, cautious client spending and macroeconomic headwinds could keep IT stocks under pressure in the near term.