Tata Consultancy Services Ltd (TCS) shares plunged nearly 7% to hit a near six-year low after weaker-than-expected guidance from US IT giant Accenture sparked fresh concerns over a slowdown in global technology spending.
However, despite the sharp fall in its stock price, TCS achieved a significant milestone by overtaking Accenture in market capitalisation for the first time since February 2021, with a valuation of $84.6 billion compared with Accenture’s $77.6 billion as of Thursday’s close.
TCS vs Accenture: Tata IT Giant Surpasses US Rival in Market Cap
According to Bloomberg data, TCS ended Thursday with a market valuation of around $84.6 billion, surpassing Accenture’s market capitalisation of $77.6 billion. The two technology giants have exchanged positions multiple times over the years, but this marks a significant shift after a prolonged period where Accenture remained ahead.
TCS Share Price Today on NSE
TCS shares on National Stock Exchange (NSE) on Friday came under heavy selling pressure, declining 5.67% to trade at Rs 2,078.40 at around 10 am. The IT major opened at Rs 2,105.00, hit an intraday high of Rs 2,112.10 and slipped to a low of Rs 2,059.90 during the session.
Accenture’s Weak Outlook Triggers Sharp Market Value Erosion
The fall in Accenture’s valuation comes after the company issued a softer-than-expected revenue outlook for its fourth quarter and lowered the upper end of its full-year growth forecast.
Adding to investor concerns, Accenture reported a 2% decline in new bookings for the quarter ended May 31, indicating continued weakness in client spending, particularly in discretionary consulting projects.
The slowdown has significantly impacted its stock performance. Accenture shares have lost more than 50% of their market value since the beginning of the year, compared with a nearly 30% decline in TCS’s valuation during the same period.
From $263 Billion Peak to Losing Top Spot
Accenture had reached its peak market capitalisation of nearly $263 billion in December 2021, while TCS crossed the $200 billion valuation milestone in January 2022. However, changing market conditions, weaker technology spending and pressure on consulting demand have altered the competitive landscape.
Why Accenture’s Results Matter for Indian IT Stocks
Accenture’s performance is closely monitored by Indian IT companies due to its significant offshore delivery model. The company generated around $72 billion in revenue over the trailing 12 months and has a workforce of approximately 7,98,000 employees. Nearly 75% of its employees are based in lower-cost delivery centres such as India and the Philippines, including an estimated 3,25,000 employees in India.
Why IT Stocks are Crashing Today; Check Motilal Oswal’s View on IT Stocks
Motilal Oswal believes the near-term outlook for IT companies remains weak. Lower outsourcing deals, geopolitical tensions, and cautious client spending are hurting growth. Although AI is generating new opportunities, its revenue contribution is still too small to offset the slowdown in traditional IT spending. As a result, Indian large-cap IT firms may report soft performance in the coming quarters.
The brokerage’s review is “Negative. Outsourcing bookings are down 14.7% YoY, after decelerating sharply in the previous quarter as well. ACN has called out the impact of the war – direct impact from Middle East revenue and slower decision-making in EMEA………..We expect 1QFY27 outcomes for most Indian IT large-cap companies to be similarly soft.”
Should You Sell or Hold Accenture Shares? Check Jefferies Recommendation
Global brokerage Jefferies has maintained a “Hold” rating on Accenture with a 12-month price target of $185. According to the brokerage, Accenture’s consulting division delivered weaker-than-expected performance as companies continued to reduce discretionary technology and transformation spending.