Indian IT stocks suffered their worst single-day rout in recent months on Friday, losing nearly Rs 1.35 lakh crore in combined market capitalisation, after global technology giant Accenture's disappointing outlook intensified concerns about the impact of generative AI on traditional IT services. According to a Business Today report, the Nifty IT index plunged 6%, dragging the total market cap of Nifty IT companies to Rs 21.57 lakh crore. The index has now fallen 29% in calendar year 2026.
Infosys led the decline with a drop of more than 8%. Other major names—TCS, Tech Mahindra, HCLTech, Mphasis, LTIMindtree, and Persistent Systems—registered losses of around 5-6%, the report added.
The Accenture Trigger
Accenture, a bellwether for the global IT services industry, reported revenue of $18.7 billion for its fiscal third quarter. However, the company lowered the upper end of its FY26 revenue growth forecast by 100 basis points, revising the range to 3-4% from the earlier 3-5%. After adjusting for DOGE-related impacts and inorganic contributions, the updated guidance points to fourth-quarter growth of between -1.0% and +3.0% year-on-year in constant currency terms, according to the report.
This weaker outlook challenged market expectations that India's six largest IT companies would see an acceleration in growth during the period. Accenture's own shares crashed 18% after the announcement, the report noted.
Jefferies
According to an ET report cited by Business Today, Jefferies analyst Akshat Agarwal adopted a cautious stance. He warned that Accenture's lower revenue growth outlook points to additional moderation in business momentum over the coming quarters. The brokerage highlighted three key implications for Indian IT firms:
- Softer guidance indicates growth could weaken more, potentially leading analysts to trim their estimates.
- Sluggish expansion despite a low base may fuel worries about the sector's future trajectory and trigger additional valuation compression.
- Companies may need to seek alternative growth avenues, including mid-sized deals and acquisitions, to compensate for weakness in traditional service lines.
Jefferies also pointed out that even after Accenture's 18% decline, the top five Indian IT companies continue to trade at a roughly 70% premium to the global technology consulting giant, leaving room for further downside in valuations.
Nomura
Nomura flagged that the conflict in the Middle East is likely to affect both revenue growth and deal activity during the first quarter of FY27. While the brokerage expects near-term revenue growth for Indian IT services firms to remain under pressure, it believes AI-led projects will continue to scale as enterprises shift from pilot programmes to real-world implementations.
Motilal Oswal
Motilal Oswal described the implications of Accenture's results for Indian IT companies as negative. The brokerage highlighted that outsourcing bookings declined 14.7% year-on-year, following a sharp slowdown in the previous quarter. Motilal Oswal expects most Indian large-cap IT companies to report similarly subdued performance in the first quarter of FY27.
Market Context and Sector Outlook
The sell-off deepened concerns that advances in generative AI could reduce the long-term dependence on conventional IT services, creating structural challenges for the industry. The combined erosion of Rs 1.35 lakh crore in a single session underscores the fragility of investor confidence amid rapid technological shifts.
| Brokerage | Key View | Implication for Indian IT |
|---|---|---|
| Jefferies | Cautious; expects further downgrades | Valuation compression; need for M&A |
| Nomura | Near-term pressure; AI projects growing | Middle East conflict impact in Q1 FY27 |
| Motilal Oswal | Negative; bookings down 14.7% YoY | Subdued Q1 FY27 performance likely |
The rout has also widened the valuation gap between Indian IT firms and Accenture, raising the risk of additional downside. As the sector grapples with AI disruption and geopolitical headwinds, the next milestone will be the first-quarter FY27 earnings season, which will reveal how Indian IT companies are navigating these challenges.
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