Accenture, which reported an 11 per cent year-on-year revenue growth on a constant currency basis for the third quarter ended May (year ending in August), is poised for a revenue growth of 9.5-10 per cent for FY18.
A year ago, the company had eyed 5-8 per cent growth and revised it thrice, the last being at the end of the February. Analysts say broad-based growth acceleration and guidance is a positive for all Indian IT firms, especially given that Accenture’s $40 billion annual revenue is twice that of TCS. Further order inflow at $11.7 billion is also at a record high with roughly half being contributed by outsourcing services.
In addition to the sector growth, among Indian firms Tech Mahindra, Wipro and HCL Tech could benefit more given their exposure to sectors such as communication, media and telecom.
Among Accenture’s five verticals, the communication, media and telecom vertical recorded the highest growth of 18 per cent year-on-year. While large deal wins for Accenture are positive on the sector as it indicates spending improvements, analysts believe that strong Accenture results could also mean that the company is taking away market share from Indian companies. Secondly, while 60 per cent of its revenues are from new services such as digital, the metric for Indian IT firms is half that.
Analysts say that there could be further earnings upgrades given the outlook and weak rupee. The rupee has gained about 7 per cent since the start of the year which is favourable given that every per cent change in currency improves profit (before tax and interest) by 30 basis points. The large cap IT space has seen earnings upgrades over the last year by about 200 basis points.
To read the full story, Subscribe Now at just Rs 249 a month
Already a subscriber? Log in
Subscribe To BS Premium
₹249
Renews automatically
₹1699₹1999
Opt for auto renewal and save Rs. 300 Renews automatically
₹1999
What you get on BS Premium?
-
Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
-
Pick your 5 favourite companies, get a daily email with all news updates on them.
Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
Preferential invites to Business Standard events.
Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.
Need More Information - write to us at assist@bsmail.in