IT Stocks Tumble Despite Accenture’s Strong Q1 Performance

On December 20, 2024, Indian IT stocks saw a significant sell-off, reversing early gains. The Nifty IT index plunged by 2.28% as of 3:01 PM, with all its constituents trading in the red. Losses across the sector ranged up to 5.6%, signalling a broad-based correction in IT counters.

LTIMindtree Leads the Decline

LTIMindtree emerged as one of the worst-hit stocks, registering its sharpest single-day fall of over 6%. This decline added to the losses recorded in the previous session, making the company a top loser on the Nifty IT index.

Profit Booking in Persistent Systems

Persistent Systems, which closed at a record high on Thursday, also experienced notable profit bookings on Friday. Despite its previous resilience in a weak market, the stock succumbed to selling pressure. 

Nifty 50 Heavyweights TCS and Infosys Slip

Market leaders like TCS and Infosys, key components of the Nifty 50, were not spared from the downturn. Both stocks traded with losses of 1%-2%, with TCS emerging as one of the major draggers on the broader Nifty index. Interestingly, the American Depositary Receipt (ADR) of Infosys ended higher by 3.4% on December 19, 2024. 

Accenture’s Strong Performance Fails to Lift Indian IT Stocks

Interestingly, the decline in Indian IT stocks occurred despite strong earnings reported by global IT giant Accenture. The company’s first-quarter revenue of $17.7 billion beat analysts’ expectations of $17.12 billion.

Accenture’s performance was driven by a growing demand for AI-powered tools and digitisation services as businesses worldwide continue to scale AI initiatives and enhance operational efficiency. The company reported new bookings of $18.7 billion for the quarter and raised its annual revenue growth forecast to 4%-7%, exceeding previous guidance of 3%-6%.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.