Global IT consulting giant Accenture released its quarterly results on Thursday for the fourth quarter of the financial year ended August 31, 2024. The company, whose performance is seen as an indicator for the fortunes of the Indian IT services industry, expects revenue growth of 3-6 per cent in local currency for fiscal year 2025.
Analysts say this shows some optimism in the industry, with H2 FY25 for Indian IT firms expected to perform better than the first half.
The company recorded a revenue of $16.41 billion in the fourth quarter, compared with $15.99 billion for the fourth quarter of FY23, an increase of 3 per cent in USD. This was above the midpoint of the company’s guided range of $16.05-16.65 billion, or 2-6 per cent growth in local currency.
“For Indian service providers, H2 of this fiscal and FY26 will be better than the last 12-14 months. Secondly, while the financial services sector is still struggling, communications has turned around this quarter. Telecom and BFSI were both down for Accenture and Indian service providers. With interest rates, BFSI also might turn around,” said Pareekh Jain, CEO at Pareekh Consulting and EIIRTrend.
Sector-wise, communications, media & technology saw $2.75 billion, an increase of 2 per cent in USD and 5 per cent in local currency compared with Q4 FY23. In the third quarter, however, the sector recorded $2.76 billion, a decrease of 4 per cent in USD and 1 per cent in local currency compared with the third quarter of last fiscal.
Financial Services, on the other hand, stood at $2.87 billion, a decrease of 5 per cent in USD and 2 per cent in local currency compared with Q4 FY23. In Q3, this was $11.61 billion, a 4 per cent decrease in USD and 3 per cent in local currency compared to the same quarter in FY23.
Betting on GenAI
Julie Sweet, chair and CEO, of Accenture, in her post results commentary, said, “We delivered full-fiscal year new bookings of $81 billion, including a record 125 quarterly client bookings of over $100 million. We continue to accelerate our leadership in GenAI, the most transformative technology of the next decade, delivering $3 billion in new bookings for the year.”
Generative AI new bookings were $1 billion for the quarter and $3 billion for the full year. In Q3, these numbers were over $900 million for a total of $2 billion fiscal year-to-date.
“They have a billion-dollar quarterly run rate. GenAI bookings are 3-4 per cent of the $81 billion in bookings, so not a significant portion of the revenues,” Jain said, adding this may continue for the next fiscal.
Addressing analysts at an earnings call conference for Q1FY25, Infosys CEO and MD Salil Parekh said, “There is a lot of talk and discussion with GenAI, but the programmes, even though not POCs, the actual projects are not large revenue projects. And we are not seeing much transformation. So even in a large deal, the vast majority is still cost takeout, efficiency, consolidation, automation, etc.”