Indian IT stocks reversed early losses on March 21, 2025, with the Nifty IT index rebounding strongly, even as Accenture’s Q2FY25 guidance fell short of investor expectations, triggering global concerns. Surprisingly, Mphasis, Coforge, and Persistent Systems shares led the turnaround, helping the index stage a smart recovery.

Despite a weak start due to global cues, domestic IT services players extended their three-day winning streak. The rebound highlights investor confidence in India’s IT sector, supported by strong midcap performances, optimistic brokerage views, and resilient fundamentals.

Accenture’s Guidance Disappoints Global Investors

Accenture, a bellwether for the global IT services industry and a key benchmark for Indian tech firms, reported a muted revenue forecast. For FY25, Accenture expects revenue growth between 5–7%, marginally revised upward from its earlier 4–7% guidance. However, this still fell short of expectations, causing Accenture shares to crash 10% on the NYSE overnight.

Adding to concerns, Accenture’s management cited rising uncertainty in public sector engagements, mainly due to spending reviews by the U.S. government under the Elon Musk-led DOGE (Department of Government Efficiency) initiative. This contributed to investor worries, resulting in a broader tech sell-off.

Nifty IT Stages a Comeback: Midcap Stars Lead the Way

Mphasis, Coforge, and Persistent Systems Steal the Show

Despite the initial 2.5% drop in the Nifty IT index, buyers stepped in aggressively, especially in midcap IT names. By 10:30 AM, the index was trading 0.3% higher, showcasing strong intraday momentum.

• Mphasis jumped 3.5% on the back of strong deal wins and niche capabilities in BFSI services.
• Coforge surged 3.2%, driven by optimism around travel and logistics tech recovery.
• Persistent Systems rose 2.9% as digital engineering demand remains robust.

Out of 10 index constituents, nine traded in the green, with Infosys being the lone laggard, down 1.3% at ₹1,595.3. The broader tech optimism helped erase early-day jitters.

Brokerage Sentiment Mixed: CLSA Bullish, Citi Cautious

Global brokerage CLSA maintained an optimistic stance, reiterating its ‘Outperform’ ratings on TCS, Infosys, Wipro, and Tech Mahindra, citing continued growth in BFSI and Communications, Media & Technology (CMT) verticals.

On the other hand, Citi remained cautious, noting margin challenges for Indian IT firms despite favorable rupee movement. Citi, however, prefers HCL Technologies, Infosys, and Mphasis over peers.

Nuvama Institutional Equities echoed similar views, stating, “While we stay positive on the sector in the medium to long term, near-term uncertainty may weigh on valuations.”

Accenture’s Q2FY25: Highlights and Sector Impact

• New bookings for Q2FY25 stood at $20.9 billion, down 3% sequentially.
• Consulting bookings were $10.47 billion; managed services at $10.44 billion.
• GAAP diluted EPS at $3.59, up 16% YoY.
• Operating margin improved to 16.7%, up 90 bps YoY.
• GenAI adoption contributed 7% to Q2 new bookings, indicating future growth potential.

Despite solid earnings, the modest guidance and slowdown in U.S. public services spending led to a sentiment-driven selloff that rippled into Indian markets briefly.

Also Read–Bain Capital Invests ₹4,385 Crore in Manappuram Finance for 18% Stake: Strategic Growth Move

Technical Outlook: Key Levels for Nifty IT Index

From a technical perspective, the Nifty IT index took support near 34,650, marking a critical short-term base. Experts suggest a breakout above 37,500 may initiate fresh bullish momentum. Strong buying zones are anticipated near the 35,800–36,000 range.

Conclusion: IT Sector Resilient Amid Global Volatility

While global macro concerns and Accenture’s cautious outlook sparked fears, Indian IT stocks showcased resilience, led by midcaps that are agile and better placed in digital transformation niches. Investors are advised to adopt a stock-specific approach, focusing on companies with strong order pipelines, digital capabilities, and margin stability. The Nifty IT rebound reinforces investor confidence, positioning the sector for a gradual recovery despite short-term noise.

FAQs

1. Why did Nifty IT drop initially on March 21, 2025?

Due to Accenture’s weak Q2FY25 guidance and a 10% crash in its stock, which spooked global tech investors.

2. Which IT stocks led the recovery?

Mphasis, Coforge, and Persistent Systems led the rebound with gains of up to 3.5%.

3. How did Infosys perform today?

Infosys was the only major laggard, falling 1.3% amid broader index gains.

4. What is the long-term outlook for Indian IT?

Positive. Despite near-term global challenges, long-term demand for digital services remains strong.

5. What does CLSA say about Indian IT stocks?

CLSA maintains a bullish stance on TCS, Infosys, Wipro, and Tech Mahindra citing improved BFSI and CMT performance