North America to be a pain point for Indian IT firms

THE TEPID GROWTH guidance of 2-5% in FY24 by Accenture will adversely impact Indian IT firms like Wipro, Tech Mahindra and LTI Mindtree, according to analysts.

- SAMEER RANJAN BAKSHI

While Wipro will be impacted due to the weakness in the consulting business, TechM and LTIM will face pressures on account of weakening demand in the communications, media and technology (CMT) vertical.

Further, Accenture's weakest quarterly performance in North America in the recent past will also create pressures on other domestic IT firms as around 55% of their revenues come from the North American region.

"Sharp moderation in deal booking not only in consulting but also in managed services suggests rising scrutiny on IT spends. Limited growth in consulting bookings/revenues could be seen negatively for Wipro. Muted outlook for North America and communications vertical offers negative read-throughs for TechM, and LTIM," analysts at Jefferies wrote in their report.