Information technology shares traded mixed on Monday following Accenture's Q4FY26 results, with the NIFTY IT index quoted 0.60% lower at 12:32 PM, after falling 0.86% in intraday trade. According to The Indian Express, TCS and Wipro gained up to 2%, while Persistent Systems and Mphasis rose 3%. However, Infosys and HCL Technologies fell 1-3%, with the latter two briefly turning positive early in the session before swiftly falling into the red. The IT index was 1.6% off its intraday high, reflecting mixed investor sentiment despite the positive Accenture performance. Currently, Persistent Systems, Wipro, TCS and Coforge were up in the range of 1% to 3%, while LTM, Infosys and HCL Technologies were down up to 3%. The mixed performance comes after Indian IT stocks experienced a robust rally on Monday, with the NIFTY IT index surging 3.1% following Accenture's impressive Q4FY26 results and upbeat FY27 guidance.
Indian IT stocks experienced a robust rally on Monday, with the NIFTY IT index surging 3.1% following Accenture's impressive Q4FY26 results and upbeat FY27 guidance. According to CNBC TV18, Persistent Systems, Mphasis, Wipro and TCS were among the top gainers, rising 3.1%, 1.1%, 2.1% and 2.1% respectively. The positive sentiment comes after Accenture reported fourth-quarter revenue of $18.7 billion, up 7% year-on-year in constant currency terms and ahead of the top-end guidance range of $17.75-18.4 billion, with new bookings rising 5% in local currency to $22.17 billion. Accenture Chair and CEO Julie Sweet noted that the company exceeded fourth-quarter revenue guidance, grew adjusted EPS 8% and returned a record $11.5 billion to shareholders, as reported by The Hindu BusinessLine. Brokerage Nuvama said the results, bookings and guidance were slightly positive for Indian IT, providing relief to investors worried about weak discretionary technology spending and AI-driven disruption. The rally came amid growing optimism that artificial intelligence (AI) is emerging as a tailwind for the technology sector rather than an immediate threat to IT services demand, with the trend being linked to the Jevons paradox suggesting that improvements in technological efficiency can ultimately drive higher demand as technology becomes more accessible.
Moshe Katri, Managing Director at Wedbush Securities, believes Indian IT stocks could be approaching an inflection point as the AI narrative shifts from fears of an "AI apocalypse" to a potential hybrid model where humans and AI agents work together. According to CNBC TV18, Katri noted that growing concerns around rogue AI agents, data security and potential government oversight could work in favour of traditional IT services companies. For large enterprises, he said it would be difficult to allow AI companies unrestricted access to sensitive data, creating a role for IT services firms in managing a hybrid human-AI model. "Ultimately, the model will be a hybrid model where humans and agents will be actually driving this," Katri explained. This shift could be significant for Indian IT companies, which have faced pressure from concerns that AI could reduce demand for traditional technology services. Katri said valuations across the sector remain subdued and institutional ownership is also relatively low, but emphasized that the key trigger for a sustained change in sentiment will be stronger growth, which he expects could emerge over the next few quarters.
Global brokerage houses remain sharply divided over whether Accenture's strong performance signals a sustained industry-wide recovery or merely company-specific market-share gains at the expense of India's top tier-1 tech firms. Morgan Stanley took an encouraging stance, noting that Accenture's forecast came in ahead of both in-house expectations and broader consensus, highlighting that sentiment around Indian IT counters should turn favorable in the near term, aided by a visible pickup in short-cycle deal conversions and the stabilization of enterprise spending disruptions in the Middle East. BofA Securities noted that Accenture's growth exceeded the top end of management's targeted range, largely propelled by strong deal conversions among small-sized engagements, viewing the Q4 beat and in-line FY27 guidance as a neutral read-across for Indian IT, while flagging management's constructive commentary on enterprise AI adoption as a medium-term positive. However, CLSA took a notably skeptical posture, arguing that Accenture's 3% to 6% guidance beat underscores how the global consulting giant continues to outpace Indian rivals. CLSA projected only low-single-digit expansion for Indian IT companies and warned that TCS and Infosys currently trade at valuations comparable to Accenture but risk trading at a marked discount if market share erosion persists into FY28. Ajit Mishra from Religare Broking believes Accenture's stronger-than-expected FY27 revenue growth guidance is a positive signal for the Indian IT sector, noting that AI adoption is increasingly translating into revenue-generating projects, though he cautioned that recovery is unlikely to be uniform due to pricing pressure and AI-led productivity gains.
The focus now shifts to the September quarter earnings of Indian IT companies, with the Q2 earnings season beginning with Tata Consultancy Services on October 8, followed by HCLTech on October 12 and Infosys on October 23. According to The Hindu BusinessLine, India's top IT companies are likely to report muted revenue growth and broadly stable margins for the July-September quarter, as clients continue to keep discretionary technology budgets tight. HDFC Securities Institutional projects Q2FY27E tier-1 growth at -0.4% to +2.0% quarter-on-quarter in constant currency, while mid-tier companies are expected to grow 0.6% to 6.3%, partly aided by acquisitions. Analysts will focus on how quickly strong bookings translate into revenue and how far AI is deflating traditional services, with deal wins remaining soft and client decision-making staying cautious amid macro uncertainty. With the first half tracking below expectations, HDFC Securities said the FY27 recovery rests on the second half, which includes the seasonally soft furlough-impacted third quarter. Ravi Singh from Master Capital Services noted that Accenture's 3-6% FY27 revenue guidance offers relief to beaten-down Indian IT stocks and supports a tactical rally, though he emphasized that tier-1 growth is likely to remain soft while AI disruption and uneven demand remain concerns. According to analysts at PL Capital, IT companies are expected to witness a moderate improvement in Q2FY27, as macro headwinds from the Middle East conflict continue to weigh on client spending and decision-making, with the Fed's recent 25bps rate hike and possibility of another hike later in CY26 likely to keep IT spending decisions muted.
The IT sector's mixed performance came amid a broader market recovery, with the benchmark Sensex gaining 472.77 points or 0.7% to end at 72,382.47 and Nifty 50 adding 0.6% to close at 22,555.75. According to The Indian Express, many sectors, including banking, financial services and fast-moving consumer goods, also saw strong buying, helping lift the benchmarks. "Markets staged a recovery, supported by softer-than-expected US jobs data and a moderation in crude oil prices, providing some relief to investors assessing the near-term interest rate outlook," said Vinod Nair, Head of Investments at Geojit Investments. This follows a lean patch for the markets as the two key indices extended their losing run for the eighth straight week — the longest such losing streak in 25 years. According to analysts at PL Capital, IT companies are expected to witness a moderate improvement in Q2FY27, as macro headwinds from the Middle East conflict continue to weigh on client spending and decision-making, with the Fed's recent 25bps rate hike and possibility of another hike later in CY26 likely to keep IT spending decisions muted.
