The strong second quarter results reported by the US technology major Accenture, and a strong outlook by it for the year provides a positive visibility to the Indian IT services sector’s growth momentum. Indian IT stocks could be in focus on Monday due to Accenture's strong results, feel many experts.
Accenture has provided revenue growth guidance to 24-26 per cent, up from 19-22 per cent YoY.
For the second quarter of fiscal 2022 ended February, Accenture reported record new bookings of $19.6 billion, up 22 per cent from the second quarter last year, with record bookings in both consulting and outsourcing of $10.9 billion and $8.7 billion, respectively.
KC McClure, CFO, Accenture, told analysts, “We were pleased with our new bookings, which were driven by both technology services and strategy and consulting, as well as 36 clients with bookings over $100 million.”
Accenture’s upgrade in FY22 guidance provides visibility to the Indian IT services sector’s growth momentum. While supply-side challenges remain a point of concern, Accenture’s margin guidance implies stable margin performance in FY23, said a report by Motilal Oswal.
“We maintain our positive stance on the sector as we expect sustained growth with stable margins. Infosys, HCL Technologies and TCS remain our preferred picks within the Tier I IT space,” it said.
Ramkumar Ramamoorthy, Partner at Catalincs, a tech advisory firm, said Accenture’s strong growth guidance is a big positive for Indian IT across large and mid-tier companies. Those that have deep consulting, digital and domain capabilities, coupled with the ability to recruit quality tech talent at scale, will be the biggest beneficiaries of robust discretionary spend of enterprises.
With only 30 per cent of the workloads having moved to the Cloud, and many enterprises still in early stages of transforming themselves to the demands of Industry 4.0, ESG and cyber-security, a long-term, double-digit growth seems a likely reality for all growth-oriented Indian IT companies.”