ADRs of Wipro, Infosys slump as Accenture cuts guidance on clouded outlook
Infosys and Wipro declined sharply in trade on Thursday as peer Accenture Plc slashed its annual guidance, suggesting that the overall business environment for software services continues to be soft.
The ADRs of Infosys fell 3% to $18.41, and that of Wipro slipped 1% to $5.88 on the New York Stock Exchange.
In early trading hours, shares of Accenture slumped as much as 6%.
Accenture now expects its full-year revenue to grow in the range of 1-3%, against its prior expectation of 2-5%.
The IT industry has been grappling with sluggish demand for software and consulting services as high interest rates discouraged enterprises from discretionary spending.
With a view to cut down costs, Accenture had to lay off employees, which will see it booking $450 million in severance-related costs this fiscal year, after recording $1.1 billion the previous year, when it said it would cut around 19,000 jobs, or 2.5% of its workforce.
Accenture also forecast third-quarter revenue in the range of $16.25 billion to $16.85 billion, which was lower than expectations of around $17 billion.
New bookings, a key indicator of future revenue, fell 2% for Accenture to $21.58 billion for the second quarter, while revenue for its communications, media & technology segment fell 8% year-on-year.
Back home, shares of Wipro ended 1.4% higher at Rs 500.70, and those of Infosys closed flat at Rs 1,555.20.
IT stocks back home are likely to fall when trade resumes on Friday following the bleak outlook by Accenture.
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