Indian IT stocks fell on Monday after Accenture reported lower deal bookings in the first quarter of fiscal 2023, ending 30 November, at $16.2 billion, a 3% decrease in US dollars value. Despite reporting a 5% rise in revenues to $15.7 billion in US dollars and 15% in local currency over the same period last year, the recession fears and slowdown in the tech industry dragged domestic stocks, with the Nifty IT index dropping 0.60%. Benchmark NSE Nifty 50 was up 0.38% at 18,338.60 points. Global stocks have a major impact on the Indian IT industry as most of their earnings come from international clients.
Infosys share price fell 0.90% or Rs 13.65 to Rs 1,508.55; TCS share price fell 0.55% or Rs 17.75 to Rs 3,222.50; Wipro stock fell 0.54% or Rs 2.10 to Rs 387.65; and HCL Tech shares dropped 0.31% or Rs 3.15 to 1,026.50. In the previous session, Accenture Plc shares plunged 5.92% or 16.64 points settling at $264.48 on New York Stock Exchange (NYSE).
“Though ACN’s bookings were lower during the quarter, the management indicated continued demand strength and expects bookings to be strong in 2QFY23. A sharp 700bp improvement in attrition and ACN’s margin guidance implies an easing supply scenario and strong margin performance for the Indian IT industry. We continue to maintain our positive stance on the sector as we expect good demand over the medium term and strong margin recovery. TCS, HCLT, and INFO remain our preferred picks within the Tier-I IT space,” said brokerage firm Motilal Oswal.
“We believe from Q3FY23 management commentary of Indian IT services will start to weaken and impact on revenue growth will be visible in Q1 & Q2 of FY24. We believe Indian IT Services should always be accumulated when the US macro is at its maximum pain & next 6-9 months (or further de-rating of 10-15% in the index) will give investors a good opportunity to accumulate preferred bets. We have Cyient as our top pick in our coverage universe followed by HCLT- which offers a good risk-reward ratio. For other stocks in our coverage universe, we will wait for better entry levels,” said analysts at ICICI Securities Ltd.