IT Stocks in focus: Infosys American Depository Receipts (ADRs) fell sharply by up to 5 per cent in pre-market trading on Thursday after global IT services major Accenture had lowered its revenue growth outlook for fiscal 2026, triggering selling pressure across the IT sector.
Accenture’s weak guidance triggers selloff
Accenture has narrowed its full-year fiscal 2026 revenue growth guidance to 3-4 per cent in local currency, down from the earlier range of 3-5 per cent. The company also reported third-quarter revenue of USD 18.7 billion, which missed analyst expectations of around USD 18.76-18.78 billion.
Accenture’s revenue guidance for the fourth quarter stood at USD 17.75 billion to USD 18.4 billion, falling short of analysts’ estimate of USD 18.47 billion. Consequently, the company’s shares tumbled nearly 14 per cent in pre-market trading.
Accenture’s earnings per share (EPS) rose to USD 3.80 in the third quarter, up from USD 3.49 a year earlier. The company’s revenue increased by 5.6 per cent to USD 18.7 billion, though it fell slightly short of the market estimate of USD 18.76 billion. Total bookings declined by 1.9 per cent to USD 19.32 billion, although consulting bookings recorded a 13 per cent year-on-year increase.
Infosys and other Indian IT giants like TCS, Wipro, and HCL Tech often move in tandem with global peers like Accenture due to similar business models and client bases. A weak opening is expected for Indian IT stocks on Friday.
When a foreign company wishes to list on the US market, it must issue ADRs. Several Indian companies — such as Infosys, Wipro, ICICI Bank, HDFC Bank, and Dr Reddy’s — are listed in the US via ADRs. An ADR is a certificate representing shares of a foreign company that trades on the US stock market. Essentially, if an Indian company (like Infosys or Wipro) wants to offer US investors the opportunity to invest in its shares, US banks issue ADRs backed by those shares.
US investors can then buy and sell these ADRs in dollars on US stock exchanges without directly investing in the Indian stock market. Consequently, when the ADR of an Indian company rises or falls in the US, the impact is often reflected in the company’s share price in India on the following trading day.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
