Shares of leading IT companies were under selling pressure on September 26 after a weak outlook from Accenture dampened investor sentiment, taking the Nifty IT index lower by more than a percent, extending losses for a sixth session in a row.
Accenture Expects Slower Growth
While announcing results for the fourth quarter of the financial year 2025, consulting firm Accenture Plc said it expects US federal spending cuts on consultants to slow its growth next year, and sees a 1-1.5 percent impact on revenue from a slowdown in US federal business during the year through August 2026.
Accenture also said it is laying off some employees as it pivots towards Artificial Intelligence. "We are exiting, on a compressed timeline, people where reskilling based on our experience is not a viable path for the skills we need," Accenture CEO Julie Sweet told analysts during an earnings call.
Recently, Tata Consultancy Services (TCS) - India's largest IT services company - also announced layoffs of over 12,000 employees on similar grounds.
Accenture Q4 Results
Despite the grim outlook, Accenture reported better-than-expected results for Q4FY25. The consulting firm reported a revenue of $17.6 billion, higher than Bloomberg's consensus estimate of $17.4 billion. Accenture expects to clock in a revenue growth between 2-5 percent for the full-year 2026, slightly below estimates of 5.3 percent, according to data compiled by LSEG, as quoted by Reuters.
Changes to H-1B visa policy are not likely to have a significant impact on Accenture's business, CEO said, adding that only about 5 percent of its US employees are employed on such visas.
What Analysts Say
Macquarie said the common takeaway from Accenture's announcements is that "demand recovery is patchy as of now." Goldman Sachs said that while the FY26 revenue growth expectations remain unchanged, the FY27 growth estimate for Indian IT firms could be at risk if discretionary demand shows no signs of improvement this year.
Jefferies added that Accenture's muted growth guidance poses downside risks to consensus expectations of acceleration in growth in FY27 for Indian IT firms.
Top IT Losers
LTIMindtree (LTIM), Wipro and Infosys shares fell around 2 percent each, while Coforge, Tech Mahindra (TechM), Persistent Systems, HCL Tech and Tata Consultancy Services (TCS) shares were down more than 1 percent each. Some of the leading IT stocks are down up to 30 percent in 2025 so far.
Trump's Proposal
President Donald Trump-led US administration has proposed to scrap the lottery system for H-1B visas and replace it with wage-based selection process. The new proposal by the Department of Homeland Security aims at bringing in "a weighted selection process that would generally favour the allocation of H-1B visas to higher-skilled and higher-paid aliens, while maintaining the opportunity for employers to secure H-1B workers at all wage levels".
The new process, if finalised, would give more weight to applications by employers who pay high wages if annual requests for the visas exceed the statutory limit of 85,000, the notice said, as cited by Reuters. The move aims to better protect Americans from unfair wage competition from foreign workers.
Also Read: Our LIVE blog on stock market updates
US to Hike Fresh H-1B Application Fee
Trump had recently announced that the US will introduce a $100,000 fee for fresh H-1B visa applications, an unprecedented increase from the earlier fee range of $215-5,000, depending on the company size. This move had earlier sent the IT stocks to a spin, after a brief rise following US Federal Reserve's rate cut.
India was the largest beneficiary of H-1B visas last year, accounting for 71 percent of the approvals, while China was a distant second at 11.7 percent, according to US government data cited by Reuters.
(With inputs from agencies)
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