Accenture - Q1 Guidance Intact; Implies Modest Growth For Indian IT In FY25: Dolat Capital

Dolat Capital Report

Accenture Plc reported in-line growth of 1% YoY in constant currency terms (guided -2% to +2%), led by outsourcing segment, up 5% YoY, while revenues in consulting declined by 2% YoY.

New bookings at $18.4 billion, up 14% YoY (4.8% YoY on last twelve months basis) with book-to-bill of 1.1 time.

Outsourcing/consulting bookings were up 21%/6% YoY, with book-to-bill of 1.3 times/1.0 times respectively.

Accenture maintained its revenue growth guidance of 2% to 5% for FY24 inc. 2%+ inorganic growth. Organic growth range of 0-3% implies compound quarterly growth rate of -0.8% to +1.1% for next three quarters which implies no meaningful demand acceleration expectations even till August 2024.

View for Indian IT:

Retained guidance indicates deterioration is likely limited, although cautious commentary will continue to translate into muted growth. Looking at Accenture implied guidance for H2 FY24, we should expect mid-single digit growth for Indian IT in FY25 in best case scenario, and do not add comfort to recent up-move.

Maintain preference for large caps with HCLTech Ltd./Infosys Ltd. as preferred bets.

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