IT Stocks Decline After Accenture Cuts its Revenue Guidance; HCL Tech, Coforge, Wipro Top Losers

On March 22, 2024, tech giant Accenture cut its revenue guidance, causing IT stocks to come under a bear grip. The IT services provider reduced its fiscal year 2024 revenue forecast on March 21, 2024. It cited an uncertain economy that prompted clients to curtail spending on its consulting services. This move sent its shares down around 5.6 percent in premarket trading, according to a Reuters report.

Accenture now expects full-year revenue growth in the range of 1 percent to 3 percent, down from its previous forecast of 2 percent to 5 percent. The firm has been grappling with sluggish demand for its IT and consulting services as high-interest rates slow down an industry that experienced rapid growth during the pandemic.

The company also forecasted third-quarter revenue in the range of $16.25 billion to $16.85 billion, falling below an estimate of $17.01 billion, according to LSEG data.

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New bookings, a key indicator of future revenue, declined by 2% to $21.58 billion for the second quarter. Its revenue for its Communications, Media & Technology segment dropped by 8% year-over-year.

Accenture reported revenue of $15.80 billion, slightly lower than analysts’ estimate of $15.84 billion.

Nifty IT declined by over 2 percent, with HCL Tech, Coforge, and Wipro falling over 2 percent. These were followed by LTI Mindtree, Persistent Systems, Infosys, Tata Consultancy, and Tech Mahindra.

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