IT stocks sink: Nifty IT tumbles 6% as Infosys, TCS, HCL Tech slump after Accenture cuts guidance

Stocks like Infosys, TCS, Tech Mahindra, Mphasis, among others, that crashed after the opening bell on Friday, as one of the global bellwether IT firms, Accenture, charted a subdued outlook for the sector, resulting from the impact of the West Asia crisis.

A lowered revenue estimate from a company like Accenture means the management estimates lower income from its core business operations.

As Indian IT firms are involved in the execution side of the spectrum, potentially lower business from the same pool of clients may weigh down on the overall business in the same period.

Why are IT stocks falling today?

The benchmark stock market indices snapped their winning streak, with IT stocks witnessing heavy selling pressure from investors after the global IT sector bellwether company, Accenture, trimmed down its revenue estimate for FY2027.

In its outlook, Accenture revised its revenue target to the range of 3% to 4%, compared to the company’s earlier estimates of 3% to 5% range.

This acted as the primary catalyst for the weak market sentiment among tech stocks, as Accenture attributed its subdued projection largely to the impact of the West Asia crisis on the company’s consulting business.

The company is expected to witness a $100 million revenue impact in its consulting business for the period. On the cash flow side, the company expects free cash flow to be in the range of $10.8 billion to $11.5 billion.

Accenture also estimates that the company will witness a 1% impact from its US federal business, which will further impact the revenues.

“Accenture down 18% in a single session, with the Nifty IT index falling 6% in sympathy, is not an event; it is the broader recognition of an AI-led revenue pool compression that has been building underneath the sector for several quarters,” said Harshal Dasani, Business Head, INVAsset PMS.

While analysts from the leasing investment firm, HSBC, said that the Indian IT companies continued to lack short-term triggers, with their valuations seeming close to the trough.

IT stocks snapshot

After Accenture's announcement in US hours, the American Depository Receipt (ADR) shares of companies like Infosys and Wipro tanked on Nasdaq on Thursday evening as the market was pricing in the subdued sentiment.

Here's how IT stocks were performing after the Indian stock market opened on Friday, June 19.

*Please note: All details related to the CMP, intraday returns, and YTD returns have been collected from the NSE website.

How did Accenture perform in Q3?

Accenture follows a September to August financial year, and in the third quarter results released on June 18, the company reported a healthy revenue growth with robust cash flows and profitability factors.

The financial results showed that the company’s revenues remained strong at $18.7 billion, marking a 6% YoY rise, with the EMEA region witnessing the highest growth at a 10% rate among other geographies.

Accenture’s operating margins also expanded by 20 basis points to 17%, while the operating profits jumped 6% to $3.18 billion. The financials also showed that the new bookings in the consulting business were at $10.26 billion, while the managed services new bookings were at $9.06 billion.

Accenture’s management highlighted that the market demand for large-scale reinvention remains strong, with 100 quarterly client bookings of $100 million or more so far in the calendar year 2026.

“We are seeing more large-scale AI transformation programs while executing our strategy to capture new areas of growth,” said Julie Sweet, Accenture Chairperson and CEO.

What do analysts expect?

Experts from CLSA said that Accenture's revenues were in line with expectations, with managed services revenue growth marking a decent 5% growth. However, the order book remained weak, declining 14.7% YoY due to the West Asia conflict reducing large deals.

Investors' concerns also remained on the pressure from artificial intelligence (AI), which, along with the conflict disruption, is weighing down the outlook.

“ACN’s guidance cut signals continued soft demand environment, which is a negative read across for Indian IT. However, softness is driven by the Middle East disruptions rather than AI-led productivity pressures,” said analysts from HSBC.

Japan-based Nomura analysts expect that the indirect impact of the conflict is estimated to continue in the next quarter, and the conditions remain unclear on how quickly spending behaviour will normalise in the market.