Infosys, Wipro ADRs Fall On NYSE After Accenture Lowers FY Revenue Guidance

The American Depository Receipts (ADRs) of Infosys and Wipro came under pressure on the New York Stock Exchange (NYSE) on Thursday after Accenture lowered its annual revenue growth guidance and flagged continued pressure on demand.

Infosys ADR ended 9.71% lower at $10.56 apiece after falling more than 10% during the session.

Wipro ADR closed 3.63% lower at $2.39 apiece. The stock had dropped over 9% intraday to a low of $2.25.

The weakness extended across the global information technology (IT) majors. Accenture shares plunged more than 17%, while Cognizant fell over 10%. IBM declined more than 5% and Capgemini ended the session down 8.9%.

Following Accenture's observations, Infosys and Wipro shares tumbled up to 8% in early trade on the Bombay Stock Exchange (BSE) on Friday.

Shares of other IT majors like TCS, HCL Tech and Tech Mahindra also declined in intraday deals. The sell-off erased nearly ₹2 lakh crore in market cap of BSE-listed firms within minutes.

Accenture Trims Growth Forecast

Accenture narrowed the upper end of its full-year revenue growth guidance, citing a challenging business environment. The company now expects annual revenue growth of 3% to 4% in constant currency terms, compared with its earlier forecast of 3% to 5%.

Excluding the impact from its US federal business, Accenture projected revenue growth of 4% to 5%, lower than the earlier expectation of 4% to 6%. For the fourth quarter, the company forecast revenue between $17.75 billion and $18.4 billion. That was below analysts’ average estimate of $18.47 billion, according to the London Stock Exchange Group (LSEG) data.

Accenture also said its Middle East business took a $400 million hit during the third quarter due to the ongoing conflict in the region. The company warned that the impact could continue into the fourth quarter.

Bookings And Revenue Miss Expectations

Third-quarter new bookings declined around 2% to $19.3 billion. Revenue rose 6% to $18.72 billion but came in slightly below analysts’ expectations of $18.75 billion.

At the same time, Accenture said it plans to spend $9 billion on acquisitions this year, up from $5 billion earlier, as it increases investments in artificial intelligence (AI), cloud and data-related capabilities.

Also Read - SBI Approves ₹60,000 Crore Capital Raise For FY27 Through AT1, Tier 2 Bonds

What Experts Feel?

Experts said Accenture’s latest commentary indicated near-term growth pressure as softer deal bookings, lower guidance and a difficult macro environment continue to weigh on demand. They opine that AI spending is largely being reallocated from existing budgets rather than creating incremental technology spending.

Sources:

Livemint

NDTV Profit

The Economic Times