Accenture Shares Plunge 11% Despite Q3 Revenue Beat, Infosys ADRs Drop 3%
Introduction to Accenture’s Q3 Results and Market Impact
On June 20, 2025, Accenture shares tanked 11%, hitting a 52-week low of $274.96, despite the company surpassing third-quarter revenue estimates with $17.7 billion, driven by strong demand for AI services. This drop dragged down Indian IT stocks, with Infosys ADRs falling 3% to $17.68.
The unexpected decline, despite positive earnings, reflects concerns over reduced U.S. federal contracts and weaker bookings, impacting sentiment for Indian IT firms like Infosys and Wipro. Let’s dive into the stock market dynamics, reasons for the fall, and implications for investors.
Table of Contents
Accenture Q3 Results: A Mixed Picture
Accenture reported an 8% year-on-year revenue growth, reaching $17.7 billion against estimates of $17.3 billion, fueled by enterprise demand for AI-driven consulting. Earnings per share rose 15% to $3.49, beating expectations, and the company raised its FY25 EPS guidance to $12.77-$12.89.
However, new bookings dropped 6% to $19.7 billion, missing analyst estimates, signaling caution in discretionary spending. Accenture also restructured under a new Reinvention Services unit, led by Manish Sharma, to adapt to the AI era.
Despite the revenue beat, concerns over declining bookings and U.S. federal contract challenges drove the share price down.
Impact on Infosys ADRs and Indian IT Stocks
The ripple effect hit Indian IT firms, with Infosys ADRs dropping 3% to $17.68 on June 20, 2025, as per the finance card above. Other Indian IT stocks like TCS and LTIMindtree also saw declines of 2.5-3%, while HCL Technologies gained marginally.
The Nifty IT index fell 1.4%, reflecting broader sector concerns. Accenture’s results often set the tone for Indian IT firms, as they rely on similar global clients. Reduced discretionary spending and a 10.5% drop in consulting bookings raised fears of a soft FY26 for Indian IT, despite AI demand.
Why Did Accenture Shares Tank?
Despite the revenue beat, several factors led to the 11% drop in Accenture shares:
- Weak Bookings: A 6% decline to $19.7 billion signaled lower future revenue.
- U.S. Federal Contracts: Reduced contracts hurt growth prospects.
- Market Sentiment: Investors focused on uncertainties over discretionary spending.
- Valuation Concerns: High expectations weren’t met, despite a “GOOD” financial health score.
The stock hit a 52-week low of $274.96, down from a high of $398.35, as per the finance card above.
Comparison of Accenture and Infosys Stock Performance
| Stock | Current Price (USD) | 1-Day Change | 1-Month Change | Key Factors |
|---|---|---|---|---|
| Accenture (ACN) | 285.37 | -11% | -10% | Weak bookings, federal contract cuts |
| Infosys (INFY) | 17.68 | -3% | -2% | Spillover from Accenture’s decline |
The finance card above shows Accenture shares dropped from $306.38 (previous close) to $285.37, while Infosys ADRs fell from $18.43 to $17.68 on June 20, 2025.
Implications for Indian IT Investors
The decline in Accenture shares and Infosys ADRs highlights challenges in the IT sector:
- Cautious Outlook: Accenture’s unchanged FY25 growth guidance (5-7%) signals limited recovery in discretionary spending.
- AI Growth: Strong demand for AI services offers hope, with Accenture reporting $1.5 billion in generative AI bookings.
- Mixed Performance: Tier-2 Indian IT firms and HCL Technologies gained, while Infosys and LTIMindtree lagged.
- Brokerage Views: Morgan Stanley prefers TCS and Infosys (Equal-weight) but downgraded Tech Mahindra, citing limited upside.
Investors should monitor Accenture’s commentary on cost reduction and deal consolidation for clues on FY26.
FAQs About Accenture Shares and Infosys ADRs
Q1: Why did Accenture shares fall despite beating revenue estimates?
A: Accenture shares dropped 11% due to weak bookings and reduced U.S. federal contracts.
Q2: How much did Infosys ADRs decline?
A: Infosys ADRs fell 3% to $17.68 on June 20, 2025, per the finance card above.
Q3: What drove Accenture’s Q3 revenue growth?
A: Demand for AI services and consulting boosted revenue to $17.7 billion.
Q4: How did the Nifty IT index perform?
A: The Nifty IT index dropped 1.4% after Accenture’s results impacted sentiment.
Q5: Should investors buy Infosys ADRs now?
A: Brokerages like Nuvama retain a ‘Buy’ rating on Infosys, but caution persists due to FY26 uncertainties.
Conclusion
The 11% plunge in Accenture shares to $285.37, despite beating Q3 revenue estimates, underscores challenges like weak bookings and reduced U.S. contracts. This triggered a 3% drop in Infosys ADRs to $17.68, impacting the Nifty IT index. While AI demand offers growth potential, investors should stay cautious amid discretionary spending concerns. Keep an eye on IT sector trends and Accenture’s Q4 guidance for investment decisions. For the latest market updates, visit Economic Times.
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