India IT rout deepens as Accenture guidance cuts hit 30% losers

TCS, Infosys, and Wipro each fell as much as 8% on Tuesday. The trigger was a 20% plunge in Accenture after the US consulting firm slashed its fiscal 2026 revenue guidance. The selloff wiped out roughly ₹1.5 lakh crore in market value from India's top tech exporters in a single session.

Accenture cited a “more cautious” spending environment and said generative AI is eating into traditional IT work without replacing it at scale. For Indian IT, which earns about 60% of revenue from North America, the signal was direct. TCS ended the day down 7.8%. Infosys fell 7.2%. Wipro lost 8.1%.

Sandip Sabharwal, a Mumbai-based portfolio manager, told ETMarkets: “Indian IT is a trade, not an investment, and the market just got the memo.” Daljeet Kohli, who earlier ran equity strategies at a domestic fund house, said he had already walked away from the sector months ago. “There is no price action that changes the structural problem,” he said. “AI is not additive for these companies; it's displacing the old pyramid.”

The numbers back that view. Over the past 12 months, Infosys has lost about 30% of its value. TCS is down a similar amount. The question of whether they are value traps is surfacing again. At 22 times forward earnings, Infosys is not obviously cheap for a business that may report negative revenue growth this year.

AlphaScala's proprietary score reflects the caution. INFY holds a rating of 57 out of 100 – moderate. Accenture itself sits at 46, mixed. The scores capture a market that is still assigning a premium to a business model under direct threat from a technology that spreads faster than the incumbents can adapt.

Both TCS and Infosys have strong balance sheets and return cash to shareholders via buybacks. Those are qualities value investors like. The share price keeps grinding lower because the earnings trajectory is flat to negative. A buyback at ₹3,900 is less compelling when the stock might trade at ₹3,400 six months later.

What made Tuesday's move different from earlier selloffs is that it was led by guidance rather than macro noise. Accenture's management explicitly said clients are pulling back on discretionary projects. That is a demand statement, not a rate statement. If demand stays soft through the first half of fiscal 2025, the Indian IT names will have to cut margin expectations.

Sabharwal's framing – trade, not investment – works because the sector still attracts momentum flows on any positive rupee or US data beat. Those trades last days, not quarters. Anyone holding TCS or Infosys through the year is down 30% and watching the thesis shift from cyclical to structural. Kohli's decision to walk away months ago looks prescient.