IT stocks remained in focus on Monday after Accenture reported strong Q4FY26 results and provided upbeat FY27 guidance.
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IT stocks remained in focus on Monday after Accenture reported strong Q4FY26 results and provided upbeat FY27 guidance. Accenture’s forecast of stronger-than-expected annual revenue growth lifted sentiment towards the sector and eased concerns that AI-driven disruption could weigh on technology spending.
Accenture Chair and CEO Julie Sweet, said, “We exceeded our fourth-quarter revenue guidance range and capped off another year of broad-based growth across our business, grew adjusted EPS 8 per cent, returned a record $11.5 billion to shareholders and reached a new high of 141 quarterly client bookings of $100 million or more. These results reflect the continued trust our clients place in us to help them reinvent and create value, the high level of innovation we bring every day and the extraordinary commitment of our Reinventors to our clients’ success.”
Brokerage Nuvama said the results, bookings and guidance were slightly positive for Indian IT.
The Nifty IT index advanced 1.5 per cent in early trade.
At the time of writing, the index was trading flat at 28,397.45. Persistent Systems, TCS, Wipro, Coforge and MphasiS were among the top gainers, rising up to 5 per cent, while Infosys and HCL Tech traded in negative territory.
Q2 earnings ahead
The focus now shifts to the September quarter earnings of Indian IT companies. They are likely to report muted revenue growth and broadly steady margins for the July-September quarter as clients continue to keep discretionary budgets tight, analysts said.
Analysts will focus on how quickly strong bookings translate into revenue and how far AI is deflating traditional services.
The Q2 earnings season begins with Tata Consultancy Services on October 8. HCLTech is scheduled to report on October 12, while Infosys is scheduled to report on October 23.
Emkay Global said Accenture’s fourth-quarter performance was strong, with revenue growing 6 per cent y-o-y to $18.7 billion, supported by an uptick in small deals, faster mobilisation of new contracts and over-delivery in federal. However, the brokerage said broader demand dynamics remained largely unchanged, with pricing declining in many areas in the fourth quarter and competitive intensity remaining a constraint.
Emkay noted that AI-led productivity could allow vendors to support incremental volumes with lower hiring, while fixed-price and outcome-based work now accounts for more than 65 per cent of bookings. It said Accenture’s FY27 guidance points to a stabilising demand backdrop rather than a strong cyclical recovery and maintained its large-cap pecking order as TCS, Infosys, LTM, HCL Tech, Tech Mahindra and WPRO.
HDFC Securities Institutional expects the sector to report another muted quarter, which is typically seasonally strong. It projects Q2FY27E tier-1 growth at -0.4 per cent to +2.0 per cent q-o-q in constant currency, while mid-tier companies are expected to grow 0.6 per cent to 6.3 per cent, partly aided by acquisitions.
The brokerage said deal wins remain soft, client decision-making stays cautious and discretionary spending remains curtailed amid macro uncertainty. It also expects pricing pressure to persist as AI-led productivity pass-through gets embedded in renewals and new deals.
With the first half tracking below expectations, HDFC Securities said the FY27 recovery rests on the second half, which includes the seasonally soft furlough-impacted third quarter, tempering full-year expectations.
Brokerages’ view
HDFC Securities Institutional said rupee depreciation, operational efficiencies and elevated utilisation will offset the impact of wage hikes, while AI-led deflation concerns continue to weigh on sector multiples. It said Indian IT companies maintain that direct Gen-AI deployment by enterprises remains difficult in complex, regulatory-heavy brownfield environments, keeping the role of system integrators critical. The brokerage prefers Infosys within tier-1, Persistent, Mphasis and LTM among mid-tier companies, and Zensar and Cyient among smaller names.
Kotak Institutional said IT sector valuations are downside protected but upside is capped by growth. It said the sector has largely moved beyond the terminal-value debate, with AI increasingly viewed as changing the economics of services rather than eliminating the need for services altogether. However, pricing pressure, AI-led deflation and the inability of incumbents to sustain growth beyond mid-single digits limit upside potential, according to Kotak. The brokerage said challengers are better positioned than incumbents and continues to prefer companies demonstrating consistent share gains, superior execution and stronger deal conversion. TechM, Coforge, Indegene and Sagility are its key picks, while it said PSYS’ valuations are coming down to more palatable levels.
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Published on October 5, 2026
