IT stocks came under heavy selling pressure on Friday after global consulting and technology services major Accenture on Thursday reported weaker-than-expected bookings growth and lowered the upper end of its revenue growth guidance, reinforcing concerns about a prolonged slowdown in discretionary technology spending.
The Nifty IT index fell 3.65%, making it the worst-performing sectoral index of the day. Infosys led losses among large-cap IT firms, declining 6.5%, while Tata Consultancy Services (TCS) dropped 3.06%, HCLTech fell 2.23%, and Wipro ended 1.28% lower. Among mid-caps, LTIMindtree lost 3.95%, Tech Mahindra fell 2.33%, and Mphasis declined 2.94%. Infosys, TCS and HCL Tech were also among the biggest drags on the Sensex.
The sell-off followed Accenture’s third-quarter earnings announcement, which highlighted continuing weakness in client spending. The company reported a 1.9% year-on-year decline in new bookings to $19.3 billion, citing delays in West Asia-related deals worth about $400 million and the postponement of several large managed-services contracts into FY27. It also narrowed its FY26 revenue growth guidance to 3-4% from the earlier 3-5%.
Accenture’s stock fell 19% on Friday, its sharpest single-day decline on record.
Analysts said the guidance cut has implications for Indian IT firms because they serve many of the same global clients and rely on similar discretionary technology budgets. Accenture’s revised outlook implies organic growth of 1.5-2.5%, compared with 1.5-3.5% earlier, even after factoring in acquisitions. The company also announced acquisitions of industrial cybersecurity firm Dragos and security platforms runZero and NetRise, but the deals did little to reassure investors about near-term growth prospects.
“Outsourcing bookings are down 14.7% year-on-year after a sharp deceleration in the previous quarter as well. AI implementation revenue remains nascent while discretionary spending continues to be impacted by macroeconomic uncertainty, geopolitical tensions and AI-led disruption,” analysts at Motilal Oswal Financial Services said in a note.
Shashwat Singh, fundamental analyst at Bajaj Broking, said Accenture’s lower growth forecast underlined the caution among global enterprises. “The reduction in both overall and consulting growth guidance indicates that clients remain selective in committing new technology spending,” he said.
JM Financial Institutional Equities said that the slowdown could extend into the second quarter of FY27, typically a seasonally stronger period for the sector. The brokerage said there was a risk to the industry’s expected constant-currency growth of around 3% in FY27 if earnings downgrades continue.
Analysts also said that while AI-related spending is rising, investors are increasingly questioning whether traditional IT services firms will be the primary beneficiaries. The emergence of frontier AI companies such as OpenAI and Anthropic in deployment and implementation services is raising concerns that a new generation of AI-native vendors could capture a larger share of future spending.
At the same time, some market watchers maintained that the sharp reaction in Accenture’s stock may be excessive. They pointed out that the company’s projected growth remains broadly in line with guidance issued by several Indian IT firms and reflects a broader shift in investor preference towards pure-play AI and cloud businesses rather than a collapse in demand.