Infosys, Wipro ADRs soar up to 8% as strong Accenture earnings forecast lifts mood

The ADRs of Infosys and Wipro rose in US pre-market trading on Thursday after Accenture forecast full-year revenue growth above Street expectations, easing some concerns over demand weakness in the global technology services sector. Infosys ADRs gained about 8%, while Wipro ADRs rose 3%, tracking the positive reaction to Accenture’s earnings and guidance.

Shares of Accenture rose more than 7% in premarket trading after the consulting major said it expects annual revenue growth of 3-6%, which was better than analyst estimates.

The Dublin-based company reported fourth-quarter revenue of $18.68 billion, ahead of analysts’ estimate of $18.03 billion. The company’s forecast pointed to steady demand in consulting and managed services, with AI-related work also helping sentiment at a time when investors have been worried about slowing discretionary technology spending.


The Accenture commentary is usually seen as a gauge of global demand for technology services. A stronger-than-expected outlook from Accenture improves sentiment for Indian IT exporters such as Infosys, Wipro, TCS, HCLTech and Tech Mahindra, which depend heavily on spending by clients in the US and Europe.

The gains in ADRs came after Indian IT shares had already bucked the weak domestic market trend earlier in the day. IT stocks advanced even as broader indices fell sharply, helped by softer-than-expected US inflation data that reduced expectations of an immediate rate hike.

Mphasis was among the top gainers in the domestic market, rising up to 5%. Coforge and Infosys followed with gains of about 5% and 3%, respectively, while Persistent Systems, TCS, HCL Technologies, Tech Mahindra and Wipro rose up to 2%.

Indian IT stocks have had a difficult year as clients delayed discretionary spending and investors worried that artificial intelligence could reduce the need for traditional software services work.

Tech firms are expected to report a weak September quarter, with brokerages expecting pressure from AI-led pricing changes and cautious client spending. The report said the top Indian IT firms could see one of their weakest quarterly performances in three years.

Disclosure: This article has been written by Podishetti Akash, who is not a SEBI-registered Research Analyst or an Investment Adviser. Podishetti Akash and his ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclosures here.