Accenture reported revenue growth of 1.5% during the fiscal fourth quarter, beating consensus estimates and nearing the top end of its guidance.For fiscal 2026, which they report from September to August, Accenture has guided for 0.5% to 3.5% organic growth, which is marginally higher than the 0% to 3% starting point of the previous financial year. This guidance is excluding the 1% to 1.5% impact that the company has warned of due to the slowdown in the government consulting business.
Indian IT stock have been on a five-day losing streak, plagued by the recent H-1B visa rules announced by the Donald Trump administration and some more proposed as well, for which, a
30-day consulting window has now opened.
Despite most mid-sized IT companies coming out with clarifications stating that the new rules announced or proposed, will have little to no impact on their financial performance as they have continued to reduce their dependency on the H-1B visa, the sentiment has clearly soured, which is showing up in the stock price action.
The top three losers on the Nifty IT index this week so far are Mid-sized names, led by Coforge (down 11.3%), Mphasis (down 9.2%) and Persistent Systems (down 7.3%). Largecap peers, who are bigger beneficiaries of the H-1B program and have not clarified on the extent of the damage yet are not far behind either. Tech Mahindra shares are down 7% so far this week, followed by TCS (down 6.7%), Wipro (down 5.4%), LTIMindtree (down 5.4%) and Infosys (down 3.6%).
The five-day losing streak has led to the 10 Nifty IT components wiping out ₹1.8 lakh crore in market capitalisation cumulatively. In fact, shares of TCS fell to a 52-week low on Thursday, and India’s largest IT services company is the worst performer on the Nifty IT index, since it index made a record high in December 2024. TCS will be reporting their September quarter results on October 9.
Brokerage firm Motilal Oswal believes that Indian IT services’ revenue and commentary might mirror Accenture’s commentary and expects the September quarter to be largely muted, adjusting for some seasonal gains.
“Valuations are now palatable, with the top for IT services names trading at their 10-year average price-to-earnings multiple and at a 13% discount to their five-year average,” Motilal Oswal wrote. However, it added that a structural re-rating depends on the emergence of a new tech cycle and meaningful earnings upgrades.
Citi continues to remain cautious on Indian IT, stating that the trends for the sector will have to be watched for ahead of their results.
