IT stocks surge post Accenture's good Q3, but gains may be limited

In fact, Accenture's 6 per cent growth in new order bookings was also led by outsourcing contracts, and it also raised its lower-end revenue growth guidance

At a time when investors were cautious about IT companies because of the likely impact of the Covid-19-led disruption and H1B visa issues, Accenture’s results for the third quarter (March-May 2020; Q3) surprised the Street. 

It also rubbed off positively on Indian IT stocks with the Nifty IT index gaining 4 per cent on Friday. Among major stocks, Infosys gained the most (6.6 per cent), followed by Tata Consultancy Services (TCS; 4.9 per cent), Wipro (3.3 per cent), and HCL Technologies (2.3 per cent).

While there are some positive reads for Indian IT companies from Accenture’s Q3, some factors indicate a reason