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The IT and consulting firm’s cautious guidance signals that global clients are taking longer to sign contracts and negotiating harder on pricing – a trend that typically hits Indian IT firms next.
Bengaluru: Deal delays and margin squeeze could be in store for Indian IT companies in the first quarter of this fiscal year after Accenture flagged a weaker-than-expected guidance.
The IT and consulting firm’s cautious guidance signals that global clients are taking longer to sign contracts and negotiating harder on pricing – a trend that typically hits Indian IT firms next.
On Thursday, Accenture lowered its financial year ending August 2026 revenue growth guidance to 3- 4% from 4-5% earlier. The cut triggered a sell-off in IT stocks on Friday, with Infosys sliding 6.69%, TCS 3.53% and HCLTech 2.74%.
Biswajit Maity, Sr Principal Analyst at Gartner, told DH that Accenture’s revision of full-year growth guidance to 3%-4% reinforces that the IT services market is not declining, but shifting toward more focused, high-impact spending. “For Indian IT service providers, Accenture’s outlook is a significant industry signal. With Accenture often setting the pace for the sector, Indian firms such as TCS, Infosys, and HCLTech are likely to experience similar market dynamics-slower deal closures, pricing pressures, and heightened competition for high-value projects. The spotlight on AI-driven transformation also highlights the imperative for Indian providers to accelerate their investments in advanced technology areas,” Maity said.
Enterprises continue to invest in large, AI-led transformation programmes, supported by strong large-deal momentum, while discretionary spending remains cautious. At the same time, managed services (5% growth) are outperforming consulting (1%), indicating a clear pivot toward cost optimisation and run-the-business priorities, he said, adding that this aligns with what they see across the market: enterprise IT spending is being reshaped by AI adoption, evolving customer expectations, and the need for operational agility.
IT services firms will begin reporting QIFY27 earnings next month, and analysts expect mixed results for the first quarter. Infosys has guided for revenue growth of 1.5% to 3.5% in constant currency (CC) terms for FY27, and an operating margin of 20% to 22%. HCLTech expects revenue growth guidance to be between 1% and 4% y-o-y in CC in FY27, and services revenue growth is expected to be between 1.5% and 4.5% y-o-y in CC.
Kanishk Agrawal, Chief Technology Officer at Judge Group, India, a global professional services and consulting firm, said, Accenture has lowered its guidance due to growing caution regarding discretionary technology spending and a slowdown in clients’ decision-making processes through major transformation projects. This will likely weigh on sentiment overall for the IT sector.
“Those firms that have a lot of exposure to cost optimisation, cloud migration, AI-led efficiency and managed services should be able to perform well despite macroeconomic headwinds. Revenue growth should remain modest, but margin management and deal wins will be important indicators to monitor. The quarter should showcase how well the sector can navigate through an uncertain global demand landscape,” Agrawal noted.
Kumar Rajagopalan, Vice President, Strategic Initiatives and Country Head India at Dexian, a talent and technology solutions company, said the results for Q1 are expected to show that the trend of “efficiency-first” spending is holding up as companies continue to focus on quantifiable business results rather than transformational expenditures.
Investors will be watching closely for indicators of the future direction of this sector through deal volumes, client commentary, and demand trends to better assess the sector’s performance for the remainder of FY27.
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