Shockwaves in the IT sector! Why an Accenture report has left investors in TCS, Infosys, and Wipro rattled—find out what lies ahead. Earthquake in IT sector! Why investors of TCS, Infosys and Wipro trembled with a report by Accenture, know what is going to happen next

The recent results and weak future projections of global IT and consulting sector giant Accenture have given sleepless nights to investors in the Indian information technology (IT) sector. At the global level, whenever a big company like Accenture expresses concern about its earnings or future revenue, it has a direct and deep impact on the big Indian companies listed in the domestic stock market. The selling seen in the shares of companies like Tata Consultancy Services (TCS), Infosys, Wipro and Tech Mahindra since yesterday has alerted investors that all is still not well in the IT sector.

What do Accenture’s weak signals really mean?

Accenture has kept its revenue growth guidance for the financial year lower than expected. This simply means that companies in big markets like America and Europe have significantly reduced their IT budget and spending on new projects. Since Indian IT companies derive about 60 to 70 per cent of their total revenue from American and European countries, any slowdown or cost-cutting there has a direct impact on the order pipeline and profits of our domestic tech giants.

Alarm bells for TCS and Infosys investors?

Market analysts say that this situation can be quite challenging for small and short-term traders. The phase of consolidation or decline in big stocks like TCS and Infosys may last for some time. Due to the slow pace of getting new deals, the results of the next few quarters are also expected to be weaker than expected. For Wipro, which is already grappling with internal changes and margin pressures, the situation could be a bit more dire.

What is the advice of experts for investors in this environment?

Amidst this huge upsurge and selling, there is absolutely no need for long-term investors to panic. According to market experts, whenever there is such a big correction in the shares of big companies, it is an opportunity to buy good shares at the right price. Indian IT companies have extremely strong balance sheets and have good cash reserves. Instead of investing lump sum money at this time, investors should adopt the strategy of ‘SIP’ or gradually adding good stocks to their portfolio every fall.