Indian IT stocks traded higher on Friday, supported by improved sentiment following Accenture’s Q2 earnings. The Nifty IT index rose over 2%, following strength in the broader Indian stock market.
Oracle Financial Services Software surged nearly 5%, while Tech Mahindra, HCL Technologies, Persistent Systems, Infosys and Mphasis gained over 2% each. Tata Consultancy Services (TCS), Wipro and Coforge also rose more than 1%. Barring LTIMindtree, all other constituents of the Nifty IT index were trading in positive territory.
The broader market rally further supported sentiment, with the BSE Sensex and Nifty 50 trading over 1% higher each, aided by a short-covering bounce following the previous session’s sharp decline.
Accenture Q2 results support outlook
Accenture Q2 earnings were robust and the company raised its full-year growth guidance, which analysts view as an incremental positive for Indian IT companies.
The company reported a 4% year-on-year (YoY) growth in revenue in constant currency (CC) terms to $18 billion, near the upper end of its guidance and marginally above Street estimates of $17.9 billion.
Consulting revenue grew 3% YoY (CC), while managed services (outsourcing) rose 5% YoY (CC). New bookings increased 6% YoY to $22.11 billion, with consulting bookings up 8.2% and outsourcing bookings growing a relatively modest 3.3%.
Accenture also raised the mid-point of its FY26 organic growth guidance by 50 basis points to 3.5% YoY, compared with 4% organic growth in FY25.
Indian IT sector outlook
Brokerages largely interpret Accenture’s results as a modest positive for the Indian IT sector.
Indian IT companies continue to face a dual challenge of macroeconomic headwinds and productivity shifts driven by generative AI. While companies attribute the slowdown to macro factors, increasing client focus on AI-led efficiencies is adding pressure on traditional service models.
According to Nuvama Institutional Equities, the long-term outlook for the Indian IT sector remains constructive, with generative AI expected to unlock significant growth opportunities. Additionally, following the recent correction, IT sector valuations appear increasingly attractive.
Antique Stock Broking noted that sustained demand in outsourcing and managed services, along with resilient growth in BFSI and APAC markets, provides supportive signals. However, discretionary consulting demand remains weak, and a meaningful near-term recovery is yet to materialise.
The brokerage maintains a ‘Hold’ stance on large-cap IT stocks, while preferring mid-cap names such as Coforge and Mphasis, citing their positioning in managed services, niche verticals, and AI-ready delivery models.
JM Financial expects approximately 4% constant currency growth for Indian IT firms in FY27, and believes concerns around zero terminal growth are overstated.
However, it cautions that a sector-wide re-rating may remain elusive if concerns regarding the impact of generative AI persist. Within this backdrop, the firm advocates a selective approach, favouring companies with stronger earnings visibility. It prefers Infosys among large-cap IT firms, Mphasis in the mid-cap segment, and Sagility among BPO players.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
