Accenture Q2 effect: Wipro, Infosys, TCS, Tech Mahindra, HCL Tech shares fall in early deals

Shares of Indian IT firms were the top losers in early deals on Friday after global IT giant reported its earnings for the second quarter. The stock of the Dublin- headquartered firm plunged 7.26% to $300.91 on NASDAQ on Thursday. Investors were worried after the consultancy firm said the Trump administration's efforts to trim federal spending had delayed and cancelled its new contracts. The new US administration has taken measures to cut spending and reduce the size of the federal workforce.

The global IT services player firm said new procurement actions were down, affecting its overall sales and revenue.

The BSE IT index slipped 906 points or 2.51% to 35,176 in early deals.

IT shares such as Wipro (3%), Infosys Ltd (3%), TCS (2.70%), Tech Mahindra (2%) and HCL Technologies (2.53%), Birlasoft (2.49%) were the major losers in early deals today.

On similar lines, Nifty IT index crashed 1,000 points to 36,674 in early deals.

Brokerage Nuvama referred to the Q2 show of Accenture as a negative-read across for the Indian IT sector. The management emphasised the elevated levels of uncertainty in the global economic and geopolitical environment.

"While Accenture believes it should be able to mitigate the impact on FY25 growth, the future remains uncertain. The company also derives 8% of revenue from federal agencies, which is at significant risk due to a cut in consulting spends mandate (negligible exposure of Indian IT to US government). While we stay positive on the sector in the medium to long-term, the near-term uncertainty is likely to remain an overhang on the stocks as well as the sector," said Nuvama

Accenture reported a 5% year-on-year (YoY) rise in revenue to $16.7 billion in Q2. The company had given a guided range of $16.2 billion to $16.8 billion for revenue. The IT firm narrowed the lower band of its full-year revenue growth outlook to 5-7% in local currency, from 4-7% earlier.