New Delhi, March 22 (IANS): Nifty IT index corrected 5.5 per cent in the last one month and underperformed broader markets by 4.6 per cent on account of muted guidance provided by some of the global services peers for CY24, Emkay Global Financial Services said.

Accenture's management commentary and guidance cut reflect continued softness in near-term demand as clients remain cautious about spending decisions amid macro uncertainties.

While ramp-up of large deal wins should aid growth in FY25 for select Indian companies, persisting weakness in discretionary spending puts the consensus estimate of high single-digit growth for large caps at risk, the brokerage said.

Deepak Jasani, Head of Retail Research, HDFC Securities said Accenture's performance is widely regarded as a benchmark for the Indian IT industry, providing a glimpse into the expected outcomes for Indian IT companies. Indian information technology stocks are expected to fall, tracking lowered revenue outlook by Accenture Plc.

Kotak Institutional Equities said in a note that the Accenture guidance cut captures deterioration in discretionary spending and further cut in short-cycle programmes.

"Read-through is negative for the rest of the IT services sector and indicates higher-than-expected weakness in spending," it added.

"Noting the weak near-term demand, we expect large IT services companies to start FY2025E with cautious guidance. Growth will vary considerably across companies on the basis of mega-deal ramp-ups, vertical exposure and discretionary spending. We expect a modest cut in expectations of larger companies and sharper cuts in estimates of mid-tier companies," the brokerage said.

JM Financial Institutional Securities said, "All available guidance by global peers point to growth deceleration in CY24. Accenture guidance cut further underlines the trend. That puts current FY25 growth estimates for large-cap India IT Services peers (4-9 per cent) at risk".