US tech major Accenture has given below-market-estimate revenue guidance due to reduced IT spending bought on by macro-economic headwinds and prevailing uncertainty. This is a probable indication that Indian IT firms may face headwinds and see the growth momentum slowing down, according to analysts.
Below estimate
Accenture forecasted second-quarter revenue in the range of $15.20 billion to $15.75 billion, the median of which is below the analyst estimates, according to reports. The company, however, in its first quarter (following September-August financial year), has reported revenues of $15.7 billion, an increase of 5 per cent in dollar terms and 15 per cent in local currency over the same period last year, beating market estimates.
The guidance given by the IT major is frequently viewed as a gauge for the Indian IT sector. Analysts believe the revenue growth momentum of Indian IT firms, if not in the immediate next quarter would see a slowdown in the coming quarters as the global economic scenario evolves.
Momentum may take hit
Devang Bhatt, lead analyst at IDBI Capital told businessline, “The revenue growth momentum has already been moderated for Indian IT firms. Although the next quarter wouldn’t see much difference, depending on how the challenges emerge in the future, the momentum may take a hit in the following quarters.”
Adding to this, Omkar Tanksale, Research Analyst, Axis Securities said, “Accenture’s guidance indicates pressure from the macroeconomic conditions being faced. However, its results prove the resilience of the IT sector as demand remains stable.” Hence, the IT firms may be expected to perform at par in the next quarter but would see the growth momentum slow down if pressures mount, he added.