Accenture results spark optimism, but revenue revival remains uncertain
Subscribe to enjoy similar stories. The Nifty IT index surged 2.5% in early trading on Friday, buoyed by Accenture’s latest earnings report. The global IT major reported 5% year-on-year revenue growth in constant currency (CC) for the quarter ended August (Q4FY24), exceeding the mid-point of its 2-6% guidance.
Accenture follows a September-August financial year, and the company's results are often viewed as a bellwether for India's tier-one IT firms. Significantly, Accenture’s consulting business—largely discretionary—returned to growth after six consecutive quarters of decline. The company expects CC revenue growth of 2-6% for Q1FY25 and 3-6% for FY25, with organic growth guidance for FY25 set at 0-3% (compared to -1% in FY24).
Growth is expected to be broad-based, with both consulting and managed services projected to deliver low-to-mid single-digit growth in FY25. Read this | Accenture’s Gen AI bets pay off with $3 bn in bookings However, in spite of improved growth across geographies and segments in Q4FY24, the management indicated that there is no notable change in the demand environment. Clients continue focusing on cost optimization programmes and use the savings to invest in transformation projects.
The management anticipates IT budgets to provide better clarity on demand in January-February. This was attributed as the reason for shifting the promotion cycle from December to June. These mixed signals have left IT investors guessing on revenue visibility.
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