Indian IT stocks are down today: Here we decode why
What's the story
Leading Indian IT stocks, including Infosys, Wipro, and TCS, witnessed a fall of up to 3% today. The decline came after Accenture's third-quarter results were released. Despite exceeding the revenue expectations with $17.7 billion for the quarter ending May 31, investor concerns over future demand trends and overall sector sentiment led to the sell-off.
Market reaction
A look at the share prices
Infosys led the decline among the frontline IT stocks, plunging 2.8% intraday to a low of ₹1,576. Oracle Financial Services Software (OFSS) also dropped 2% to an intraday low of ₹9,197.70. Other companies such as LTIMindtree and Tech Mahindra saw their shares decline by 1.5% each, while shares of HCL Technologies fell by 2%. Wipro recorded the smallest decline among its peers at 1.6%.
Revenue
Accenture's revenue exceeds estimates
Accenture's revenue of $17.7 billion for the quarter ended May 31, was above analysts' average estimate of $17.3 billion, as per LSEG data. The growth was driven by the continued demand for AI-driven services from enterprise clients. However, the sharp fall in share price indicates investor concerns over weakening margins and a soft outlook in key verticals.
Global impact
ADRs of Infosys and Wipro also fall
Accenture's Q3 report had a wider impact on global IT shares. Infosys ADRs fell by around 4%, while Wipro ADRs slipped by 0.34%. The company also highlighted challenges from a sluggish US federal contracting environment, which has been affected by curbing federal spending through cuts or delays in IT contracts.