Archive · 25 Jun 2025
IT Sector Rebounds, but Sustained Growth Still Uncertain
The Indian IT sector, which includes companies that provide technology services, is currently a popular investment choice among fund managers.
While one big IT company, Accenture, is doing well and growing, there are concerns.
Although the IT stock market has somewhat recovered from earlier drops, the sector's growth depends on further industry changes, with a re-rating looking distant.
Companies are seeing slower growth than before.
Indian IT sector is the most preferred investment theme among fund managers, with 21% choosing it as their top pick.
Accenture's Q3FY25 revenue grew by 7% year-on-year in constant currency, exceeding estimates.
The Nifty IT index rebounded to 38,408 after hitting a 52-week low, but is still down 11% in 2025.
Accenture raised its FY25 revenue growth guidance to 6-7% but deal bookings declined in Q3FY25.
A re-rating of the sector depends on new technology cycles and meaningful earnings upgrades.
- Who
- Investors, fund managers, and IT companies like Accenture, TCS, and Infosys.
- What
- The Indian IT sector is experiencing mixed signals in terms of growth and investment.
- When
- Q3FY25 and the coming financial quarters.
- Where
- The analysis focuses on the Indian IT market, including its relation to US market.
- Why
- Due to factors such as the demand environment, deal wins, and a potential re-rating of the sector.
Deal Wins & Market Sentiment
Revenue Growth
Investment Outlook
Deal Wins & Market Sentiment
Deal-win announcements in May were lower month-on-month, potentially signaling a slowdown.
Revenue Growth
Fund managers favor the Indian IT sector as a top investment, expecting growth.
Revenue Projections
Deal Wins & Market Sentiment
Muted deal-win scenario will create headwinds for growth in 2HFY26 and 1HFY27.
Revenue Growth
An unchanged demand environment can protect current FY26 revenue growth assumptions.
- Nifty IT Index 52-week low
- 32,517
- Accenture Q3FY25 Revenue Growth
- 7% (Constant Currency)
- Nifty IT Index YTD
- -11%
- Nifty IT Index P/E Ratio
- 26x
- Accenture FY25 Revenue Guidance
- 6-7%
