Global tech giant Accenture has cut its revenue guidance for the fiscal year ending August 2024, pouring water on the hopes of a revival in demand for domestic IT services firms that led to a sell-off in the shares of Infosys and TCS.

On Thursday, the Dublin-based firm which follows a September-August fiscal revised its full-year revenue growth projection to 1-3 per cent from 2-5.

Accenture’s performance and guidance are often considered as the barometer for the domestic industry.

While analysts were betting on a revival in demand for its domestic peers in the next fiscal, the development has now led them to pull back on such optimism.

Julie Sweet, chair and CEO, of Accenture, spoke about the ``uncertain macro environment” at a conference call. She said there were continued delays in decision-making and a slower pace of spending.

“Our clients are navigating an uncertain macro-environment due to economic, geopolitical and industry-specific conditions…We saw a further tightening of spending at our clients.. particularly on the smaller projects,’’ she said.

For the second quarter ended February 29, 2024, Accenture saw its revenues flat at $15.80 billion compared with $15.81 billion for the second quarter of fiscal 2023.

On the other hand, new bookings stood at $21.58 billion, a 2 per cent decrease in US dollars and local currency from the second quarter of fiscal 2023.

Analysts at JM Financial said Accenture barely cuts its guidance and barring the Covid-19 period, the last time it reduced the lower end of its guidance was in the third quarter of 2012-13.

This suggests uncertainty in the spending environment remains at a decadal high, JM Financial said.

The analysts said the Street is expecting 3-9 percentage points higher growth in 2024-25 over 2023-24 for the top five Indian players. “A likely weak 2023-24-exit, as suggested by our recent checks, will further pull down 2024-25 estimates, in our view.”

“We, therefore, see further calibration in the Street’s (and to an extent ours) growth expectations. That should result in valuation contraction as well. We continue to remain cautious on the sector.’’

A Kotak Institutional Equities note said that given the weak near-term demand, it expects large IT services companies to start 2024-25 (estimates) with cautious guidance.

Domestic IT services firms will start declaring their Q4 results from the second week of April.