Nifty IT trims losses sharply after 3% fall post Accenture results

Nifty IT slips sharply in Friday's trade post steady results by Ireland-based Accenture-widely considered as the benchmark for Indian IT companies. As at the last count, Nifty IT was trading with a gap down of 0.58 per cent or 212.2 points at 36,464.45, while at the day's low it marked levels of 35,674.4, a nearly 3 per cent downslide.

Pertinently for the December-February period, Accenture posted a net profit of $1.788 billion for the Decmeber-February period—its fiscal second quarter of the year, translating to an increase of 6.8 per cent over the corresponding quarter a year ago. Its revenue increased 5.4 per cent in dollar terms to about $16.659 billion, according to a regulatory filing. Accenture—which follows a September-August financial year—broadly met market expectations on the top-line and bottom-line fronts.

Nonetheless, the Dublin-based company also expressed concerns relating to reduced government expenditure.

Furthermore, for the full-year, the company has raised the lower end of the annual revenue guidance.

Also Read: Accenture Q2 Earnings: Bottom-line up 6.8%; full-year revenue guidance raised—Key highlights

Anil Singhvi's view on IT stocks performance post Accenture Q2 earnings

Anil Singhvi- Zee Business Managing Editor believes after posting recovery, Indian IT stocks fall for some or the other reason.

Also Read: Will Accenture results spell more downside for Indian IT shares? What Anil Singhvi thinks

Brokerages on Indian IT companies post Accenture results

Most global brokerages including Nomura, CLSA, Citi, Jefferies and HSBC in their reports held that Indian IT companies only only a minor exposure in the US Federal contract. Furthermore, the closure of the Education Department by the Trump administration is expected to result in minimal impact on Indian IT majors.

Also, they added that only Accenture gets as much as 8 per cent of its revenue from this vertical.

Additionally, Nomura believes IT stocks to post recovery in the new fiscal year supported by an increase in discretionary demand. Moreover, AI and cloud migration is also expected to aid significant growth for these companies.