Accenture's latest earnings have reinforced concerns surrounding the global IT services sector, with the company trimming its revenue growth guidance and highlighting slower-than-expected AI adoption. While the commentary has weighed on sentiment for Indian IT stocks, analysts believe much of the pessimism is already reflected in valuations.According to Piyush Pandey from Centrum the near-term outlook for Indian IT remains challenging, with discretionary technology spending continuing to stay under pressure."They have cut the guidance from 3-5% to 3-4%, and it indicates that demand remains weak while discretionary tech spending remains muted. For the next three to four months, the situation for Indian IT companies is also likely to remain similar," he said.He added that slower AI adoption and increased caution among clients amid geopolitical tensions in the Middle East are likely to keep growth subdued through the first half of the financial year."Accenture has indicated that AI adoption remains at a somewhat slower pace, and because of the Middle East war, clients are slightly more cautious. Even for Q1 and Q2, there is not much expectation from Indian IT services companies in terms of growth," he said.Consulting slowdown weighs on Accenture, but Indian IT has a cushionWhile Accenture's weak bookings have sparked concerns over outsourcing demand, Pandey pointed out that Indian IT companies have a different business mix, offering some protection."Consulting is a big part of Accenture's revenue, and that segment showed slower growth. Indian IT companies are mainly managed-services based rather than consulting-based, so that is one positive indicator. Accenture also reported better growth in its outsourcing segment," he added.However, he cautioned that the broader demand environment remains uninspiring."Broad demand indicators for Q1 and Q2 do not look very encouraging. The only thing in favour of IT companies is valuation. Valuations are at rock-bottom levels, and most of the negatives are already priced in."Middle East tensions likely to delay, not destroy, demandGeopolitical uncertainty in the Middle East has emerged as another concern for the sector, although Pandey believes its impact is temporary rather than structural."It mostly seems like a postponement. These orders should eventually come back, maybe after a quarter. But since TCV gets delayed, revenue conversion also gets impacted," he said.He stressed that the industry's larger challenge lies elsewhere."The bigger concern is how IT services companies adapt in the age of AI and build new revenue streams from AI services. The Middle East issue is more of a temporary concern," he added.Recovery likely to be gradual despite attractive valuationsAlthough Indian IT stocks have corrected sharply over the past several months, Pandey believes earnings recovery will take time despite compelling valuations."Most of these negatives are already priced in. TCS and Infosys are trading at roughly 12-13 times FY28 earnings, which are rock-bottom valuations," he said.He expects uncertainty around enterprise AI spending to persist over the next few quarters."There is still uncertainty regarding AI adoption, and it is happening at a slightly slower pace than initially anticipated. Any recovery would be gradual," he said.Despite the near-term challenges, he remains optimistic about the sector's structural growth story."As AI becomes mainstream, clients will require the help of IT services companies for implementation. The mid-to-long-term picture remains promising, but near-term uncertainty is impacting both TCV and revenue conversion," he added.Value territory reached, but patience is essentialWith investors increasingly favouring AI infrastructure companies and semiconductor stocks over IT services firms, Pandey believes the sector has already entered value territory."My sense is that IT services companies have already entered value territory. Investor interest is currently more towards AI-based technology companies and chip makers, while interest in IT services companies is very low," he added.He believes market sentiment has become excessively pessimistic."There is extreme fear regarding the business prospects of IT services companies. They have entered a value zone, but it will take a few quarters for the numbers to actually improve," he said.For long-term investors, the current correction may present an opportunity. However, the turnaround is likely to depend on stronger AI-led spending, improved deal conversion, and a recovery in discretionary technology budgets.