Accenture’s Poor Q2 Plays a Spoilsport; Shares of Wipro, Infosys, TCS, Tech Mahindra Tumble in Early Trade

Shares of Indian IT firms slumped in the early trade after Accenture reported its second quarter earnings. The stock of the Dublin-based tech firm fell by 7.26% to $300.91 on NASDAQ on March 20. The company said that the investors are worried about Trump’s efforts to delay federal spending and cancel new contracts. The Trump administration has taken measures to cut spending and reduce the size of the federal workforce.

BSE IT index went down by 906 points or 2.51% to 35,176 in early deals.

IT packs including Wipro (3%), Infosys Ltd (3%), TCS (2.70%), Tech Mahindra (2%) and HCL Technologies (2.53%), Birlasoft (2.49%) took a heavy beating in the early deals.

Nifty IT index crashed by 1,000 points to 36,674 in early deals.

The Q2 results of Accenture cast a dark shadow on the Indian IT sector. The management cited uncertain levels of economic and geopolitical environment, which has in turn dampened the market sentiments.

Nuvama said, “While Accenture believes it should be able to mitigate the impact on FY25 growth, the future remains uncertain. The company also derives 8% of revenue from federal agencies, which is at significant risk due to a cut in consulting spends mandate (negligible exposure of Indian IT to US government). While we stay positive on the sector in the medium to long-term, the near-term uncertainty is likely to remain an overhang on the stocks as well as the sector.”

Accenture clocked a revenue of $16.7 billion in Q2, up 5% YoY. The company had given a revenue guidance of between $16.2 billion-16.8 billion. The IT firm narrowed the lower band of its full-year revenue growth outlook to 5-7% in local currency, from 4-7% earlier.