Indian IT stocks experienced a sharp sell-off on Friday, plunging by as much as 7% following global consulting giant Accenture’s decision to lower its revenue expectations. The downbeat forecast has reignited worries regarding the broader growth trajectory of the technology sector.
The benchmark Nifty IT Index tumbled over 5% as a result. Among the heaviest hit was India’s largest software exporter, Tata Consultancy Services, which fell more than 5%. Infosys saw its shares drop over 7%, while Tech Mahindra lost more than 4%.
The market turbulence was triggered on Thursday when Accenture adjusted its revenue growth guidance for the fiscal year ending August 2026. The firm now anticipates growth between 3% and 4%, down from its previous projection of 4% to 5%.
“On the revenue side, we missed revenue consensus by $90 million, and we had a $100 million impact from the Middle East,” Accenture CEO Julie Sweet told CNBC’s Squawk on the Street on Thursday, while discussing the company’s third-quarter financial performance.
In light of the developments, global brokerage firm Citi reiterated its cautious stance on the Indian IT industry. Citi pointed out a valuation mismatch, noting that the Nifty IT index trades at roughly 16 times one-year forward earnings compared to Accenture, which trades at 10 times.
“We have been cautious given AI disruption, increased competitive intensity, GCC trends, etc.; the macro uncertainty increases the challenges near term,” Citi stated in its investor note.
