Accenture's Revised Revenue Forecast Drags Infosys and Wipro ADRs on Wall Street

22 Mar 2024 , 12:41 PM

ADR (American Depository Receipt) shares of IT giants Infosys and Wipro faced declines on Wall Street on March 21, influenced by Accenture's revised 2024 revenue projection, reflecting a cautious outlook amid economic uncertainty.

Accenture's share price plummeted over 9% in New York, marking one of its sharpest intraday drops since March 2020, following its updated revenue forecast for the year.

The consulting firm now anticipates full-year revenue growth to be within 1% to 3%, down from its previous estimate of 2% to 5%, signaling a subdued demand for its services due to economic headwinds.

Accenture's struggles echo broader challenges faced by the IT and consulting sector, impacted by sluggish demand and budget constraints among corporate clients.

CEO Julie Sweet highlighted that businesses are tightening their budgets, resulting in reduced spending allocations for additional services.

Indian IT majors such as Tata Consultancy Services (TCS) and Infosys have previously reported subdued quarterly results, reflecting a similar trend of reduced spending in the industry.

Accenture's third-quarter revenue forecast of $16.25 billion to $16.85 billion fell below market estimates, contributing to the negative sentiment. New bookings for the second quarter declined by 2% to $21.58 billion, with revenue from the Communications, Media & Technology segment dropping by 8% year-over-year.

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