The Indian share market opened red today as the shares of the second largest IT player Infosys plunged by 8 percent hitting their 5 year low. Infosys was the top dragger, down 7.5%, followed by Mphasis, Tech Mahindra, Persistent Systems and TCS, all declining over 6% each as Accenture trimmed the upper end of its full-year revenue growth forecast and issued a weaker-than-expected outlook in the fourth quarter. Meanwhile, HCL Tech, Coforge, LTM also shed over 5% each, and Wipro and L&T Tech were down 4% and 2%, respectively.
Accenture one of the leading professional IT service firms on Thursday warned about low revenue generations in the current fiscal year than expected dogged by the unrest in the Middle East and investor dilemma about AI future. The firms’ stocks themselves plunged by 18% in the early trade- the lowest in a decade after the IT firm released its quarterly earnings and updated guidance, triggering a broad-based selloff across IT services worldwide.
The consultation giant lowered its revenue guidance for the fiscal year and disclosed $400 million impact on its regional business during the third quarter due to the war driven crises. It now expects annual revenue growth of 3% to 4% in constant currency terms against its earlier forecast of 3% to 5%. Third-quarter new bookings declined about 2% year-on-year to $19.3 billion. Revenue rose 6% to $18.72 billion but fell short of analyst estimates of $18.75 billion.
Excluding the approximately 1% impact from its US federal business, the company expects revenue growth of 4% to 5%, lower than its previous outlook of 4% to 6%.
Despite the cautious outlook, Accenture has highlighted its continued strength in large transformation projects and announced plans to significantly increase investments through acquisitions. According to officials, the company intends to spend $9 billion on acquisitions this year, up sharply from $5 billion previously, as it strengthens capabilities in artificial intelligence, cloud computing and data services. These areas continue to attract client spending, particularly for projects focused on cost optimization and business growth.