Accenture Stock Crashed 7% After Q3 Earnings; Infosys, TCS, Wipro, Other Indian IT Stocks In Focus Next Week

Dublin based Accenture reported an upbeat Q3 earnings, however, its stock price reacted differently. On June 20th, Accenture stock crashed by nearly 7% despite the tech giant's revenue came in better than street estimates. Indian tech ADRs have reacted similarly with Infosys and Wipro closing bearish at NYSE. Indian IT stocks will be in focus accordingly on BSE and NSE next week.

Indian IT stocks follow Accenture earnings significantly. Globally, tech companies are under pressure due to US tariffs impact and economic uncertainty, which has pushed these companies to modify their spending plans. Since Trump's Liberation Day, many tech companies reported of delays or cancellation in contracts.

In its Q3 results for 2025, although Accenture surpassed street expectations in quarterly revenue and also raised its annual forecast, its new bookings declined for second consecutive quarter.

Also, CEO Angie Park signalled slower government spending to impact by 2% in its fourth quarterly and annual revenue. Following this, the share price of Accenture crashed sharply on Wall Street overnight.

On June 20, Accenture stock price closed at $285.37, down by 6.9%. Overnight, the stock lost $13.16 billion of market capitalisation.

Accenture Q3 Results:

In this quarter, Accenture reported revenue of $17.7 billion, an increase of 8% in U.S. dollars and 7% in local currency, while its perating margin of 16.8%, an increase of 80 basis points, and an increase of 40 basis points compared to adjusted¹ operating margin.

Diluted earnings per share of $3.49, a 15% increase, and a 12% increase over adjusted EPS. While the company reported free cash flow of $3.5 billion.

However, new bookings of $19.7 billion in the quarter, a decrease of 6% in U.S. dollars and 7% in local currency. Generative AI new bookings stood at $1.5 billion.

For the 2025 outlook, Accenture now expects full-year revenue growth to be 6% to 7% in local currency. The company raised its lower target to 6% from 5%, while retaining its higher target of 7% in revenue. It now expects its foreign exchange impact to positive 0.2% from earlier negative 0.5%. In terms of operating margins, Accenture expects 15.6%, an expansion of 10 basis points over adjusted operating margin, which is unchanged from previous quarter. While its diluted earnings per share is expected to be in the range of $12.77 to $12.89, higher from previous target of $12.55 to $12.79.

Accenture Chair and CEO Julie Sweet said, "I am very pleased with our third quarter fiscal 2025 results, including our 30 clients with quarterly bookings greater than $100 million, broad-based growth and continued expansion of our leadership in Gen AI. Companies need resilience and results, and we are laser-focused on delivering measurable value for our clients, which is fueling our growth and making a difference for us in the market. I want to thank our more than 790,000 people for all they do every day to deliver on the promise of technology and human ingenuity as only Accenture can."

Indian IT Stocks:

During the trading week of June 16 to June 20, TCS share price dropped by 1.2% in its weekly performance, on the contrary, Infosys stock surged marginally by 0.4%. Also, Wipro stock was up by 2%, outperforming TCS and Infosys. HCL and Tech Mahindra shares surged by 1.6% each.

Indian IT companies will announce their Q1 result for FY26, from July onward.

After interaction with Indian IT companies, analysts at Kotak Institutional Equities said, "Companies gave a moderated outlook for FY2026 after tariff imposition by the US. The overall demand environment has been stable in the past couple of months, with neither improvement nor deterioration. Demand in financial
services seems to be holding on well. On expected lines, demand from the
manufacturing vertical is soft, while it is middling in retail verticals."

Also, the analysts note added, "We derive four major conclusions from our conversations with IT companies, deal advisors and players in the tech ecosystem-(1) demand has been steady since last result declaration, with neither improvement nor deterioration, (2) deals are heavily cost takeout-driven, with the use of balance sheet by vendors in some cases, (3) adoption of AI is increasing at an accelerated pace and (4) GCC growth is driven by greenfield setups even as growth in some of the existing GCCs has started moderating. Risk-reward in the sector is in balance. Our key picks are Infosys, TechM, Hexaware, Coforge and Indegene."

Recently, both TCS and Infosys released their annual reports for FY25. According to JM Financial's report, despite their comprehensive quarterly disclosures, these annual reports offer trove of additional data/information.

JM's note said, " Both the companies have adopted a platform-led, Agentic AI-driven strategy for AI - INFO with Topaz and TCS with WisdomNext. Myriad use cases indicate adoption is rising. AI-led productivity, along with weaker demand, however, possibly explains shrinking base of employee pyramid, distorting cost structure. Subsidiaries data, especially for INFO, offer few interesting insights. For example, revenue of Infosys Automotive and Mobility GmbH - its subsidiary for Daimler project - declined for the first time (Exhibit 14), indicating project maturity. Perplexingly, it is still loss making. RPO to be recognised into FY26 revenues, though only a part of overall revenues, grew by 5%/7% for TCS/INFO, higher than FY25's, indicating improved visibility. Finally, TCS' lower Gross PPE and capex per employee explain its superior ROE (52% vs INFO: 29%). That's not appreciated enough.'