Shares of second-largest IT player Infosys Ltd plunged 8 per cent to hit their five-year low, while those of the IT behemoth Tata Consultancy Services Ltd (TCS) dropped 7 per cent to a near six-year low, as the two IT giants led the selloff at IT counters, following a weak set of FY26 guidance by the US-based consulting and IT services major Accenture. This made many brokerages including Nomura believe the Middle-east conflict may have some bearing on revenues and deal bookings of Indian IT firms in the June quarter. 

"In our view, the indirect impacts can continue in Q2FY27, as it is not clear how quickly spending behaviour will normalise, particularly in challenged sectors like automotive," Nomura said.

The foreign brokerage said that IT clients are moving beyond proof of concepts to live use cases in AI. "We believe AI will continue to drive the demand for core fundamental elements like cloud, data and platform modernisation services," it said.

Following the development, shares of Infosys cracked 8.19 per cent to Rs 1,034.85 apiece. TCS sank 6.52 per cent to Rs 2,060.50. Mphasis fell 5.96 per cent to Rs 2,199.75. Tech Mahindra, LTM, Persistent Systems, Coforge Ltd, KPIT Technologies and Wipro fell 3-5 per cent. Nifty IT index fell 5 per cent to over three-year low of 27,012.15.

Infosys and Wipro ADRs had fallen up to 10 per cent overnight.

Accenture's record fall overnight
In overnight US trading, Accenture reported weak earnings and trimmed its full-year revenue guidance to 3–4 per cent, down from its earlier estimate of 3–5 per cent. 

"The US stock plunged 18 per cent, marking its steepest single-day decline on record. The weakness spilled over to peers, with Cognizant falling 11 per cent and Capgemini declining nearly 9 per cent. Consequently, Infosys ADRs dropped nearly 10 per cent, while Wipro ADRs fell 3.6 per cent," said Nandish Shah - Deputy Vice President, HDFC Securities.

Also read: Infosys, TCS, HCL Tech shares: Why Accenture's softer guidance is alarm bell for Indian IT investors

Brokerages on Indian IT stocks
Equirus Securities said downgrade in FY26E CC Sales growth guidance (at upper end) is not material considering the elevated macro concerns led by increased geo-political issues and it is almost similar to its original growth guidance worth 2-5 per cent it gave for FY26E with its 4QFY25 results.

That said, it raised the need for entering into mid-market. This, too some extent, also implies that growth avenue in the existing business declining despite Accenture clearly indicating that AI provides growth tailwinds and lot of green shoots are emerging on demand side.

Besides, Accenture generating high free cash flow, its intent to draw long term debt implies that incremental inorganic contribution may require higher M&A budget considering its intent to not shy away buying expensive companies. 

"We remain watchful regarding the discretionary spend outlook in CY26E/FY27E ACN’s 4QFY26E growth guidance implies that macro led demand issues for the Indian IT sector may continue in 1HFY27E (Apr 2026-Sept 2026) and its major adverse impact, if any, on the growth estimates for FY27E," Equirus said.

Why Accenture results matter?
The consulting and IT services major, which derived $72 billion in revenues in the trailing twelve months, is followed closely in India, given the offshore IT industry business dynamics.  This is because a total of 75 per cent of Accenture's 7,98,000 workforce is based in the low-cost locations such as India and Philippines, with possibly 3,25,000 in India.

AI impact on Indian IT firms
Accenture's commentary suggests that AI is becoming an increasingly meaningful demand driver. That said, it remains insufficient to offset near-term weakness from discretionary spending pressures, elongated deal cycles and delayed large-program conversions, said Choice Institutional Equities.  

"Therefore, we continue to expect a gradual recovery trajectory for Indian IT rather than a broad-based acceleration in FY27. Within Tier-1, we prefer Infosys and Tech Mahindra and among mid-caps we have PSYS and COFORGE as our preferred ideas," the brokerage said.

Negative read-through for Indian IT firms

Systematix said Accenture’s 3QFY26 results are a negative read-through for IT services, with softer bookings, lowered guidance and continued client caution pointing to a challenging demand environment for Indian IT. "Macro uncertainty and geopolitical tensions are delaying decision cycles, while large deal pushouts into FY27 highlight ongoing slippage risk in mega-deal closure," it said.

Accenture has taken a huge step in acquisitions and increased the spending from earlier guided $5 billion to $9 billion for FY26. Nirmal Bang sees said  it more of a desperate attempt to maintain revenue. 

"The lowering of the FY26 revenue guidance at the top end and lower deal signings affirm our stance on revenue compression and deal signing stagnation. While some of this can be linked to the ongoing conflicts in the Middle East, we believe much of this is due to AI-led shocks and efficiencies. Indian IT services should focus on scaling up AI capabilities, securing large deals, and improving operational efficiencies to mitigate margin pressures in a competitive market environment," Nirmal Bang said.  

MOFSL said the Accenture's outsourcing bookings were down 14.7 per cent YoY, after decelerating sharply in the previous quarter as well. Accenture has called out the impact of the war – direct impact from Middle East revenue and slower decision-making in EMEA. "However, there are limited triggers right now to accelerate revenue. AI implementation revenue uptick is too fragile, whereas discretionary spends continue to be hit from multiple directions – war, macros, and, of course, AI. We expect 1QFY27 outcomes for most Indian IT large-cap companies to be similarly soft," MOFSL said.