Accenture's Modest Growth Forecast Rattles Indian IT Stocks

29 Sep 2023 , 12:26 PM

Major Indian IT stocks like Infosys, Wipro, and Tech Mahindra experienced declines of up to 1% on September 29 due to Accenture’s modest revenue growth guidance. Accenture, headquartered in Dublin, projected a 2-5% YoY revenue growth in constant currency terms for FY24, causing the IT stock reaction.

On September 28, the ADRs of Infosys and Wipro on the New York Stock Exchange fell up to 3% in overnight US trading following Accenture’s guidance. Accenture reported a 3% sequential decline in deal bookings in Q4FY23 compared to earlier flat growth expectations, impacting the broader IT sector.

Accenture’s management indicated no assumptions of macro-environment improvement in the full-year guidance, planning for gradual progress after a weak Q1FY24. In Q4FY23, Accenture saw a 4% YoY revenue growth in CC terms at $16.1 billion, slightly below consensus.

The company’s operating margin increased 20 basis points YoY to 15%, meeting the adjusted margin guidance of 15.4%. Attrition remained stable, and around 950 employees were added during the August quarter.

Demand in the financial services and communications and media (CMT) verticals was weak in Q4FY23, with CMT vertical reporting a 12% YoY decline in CC terms.

For feedback and suggestions, write to us at [e-mail]