Shares in tech consultancy Accenture (ACN) dropped today on reports that it is planning to add thousands of new jobs in India in the wake of President Trump’s new visa policies in the U.S.
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Land Request
According to a Reuters article, Accenture has proposed setting up a new campus in the southern Indian state of Andhra Pradesh, aiming to eventually add about 12,000 jobs to its existing workforce there.
India is already Accenture’s largest employee base globally, with more than 300,000 of its 790,000 employees based in the country. It is also a vital part of the company’s global revenue growth -see below:
As part of the proposal being reviewed by the state government, it is understood that Accenture has requested land of about 10 acres in the port city of Visakhapatnam. It is unclear how much it intends to invest in the new campus.
Accenture did not comment.
“It is not an unreasonable ask by Accenture, and the proposal will go through,” an official for the Andhra Pradesh government said.
Tech Expansion
Technology firms have been increasingly expanding to smaller Indian cities to tap lower land, rent and wage costs.
This move comes amid U.S. President Trump’s policy change requiring a $100,000 fee for new H-1B visas, widely used by tech firms to hire skilled foreign talent. The move is expected to hurt the IT sector, by far the largest beneficiary of H-1B visas last year.
It is also set to batter tech giants that are major employers of foreign talent, including Amazon (AMZN), Alphabet (GOOGL), Microsoft (MSFT) and Cognizant (CTSH) quickly telling H-1B holders to remain in the United States.
The sector also faces uncertainty as customers could delay or re-negotiate contracts as the U.S. debates a proposed 25% tax on American firms using outsourcing services.
These pressures have weighed heavily on Accenture shares this year with the price dropping 31% – see above.
Is ACN a Good Stock to Buy Now?
On TipRanks, ACN has a Moderate Buy consensus based on 10 Buy, 6 Hold and 1 Sell ratings. Its highest price target is $395. ACN stock’s consensus price target is $306.81, implying a 29.15% upside.
