Indian IT stocks find themselves under scrutiny as brokerages assess the implications of Accenture’s strong Q1 revenue growth and mixed global demand cues. Here’s a roundup of key insights:
Jefferies: Positive on Financial Services and Large Deals
Jefferies noted that Accenture’s robust Q1 performance was driven by large deals ramping up faster than expected, with strong net hiring despite flat demand. The brokerage pointed out that the uptick in financial services bodes well for Indian IT companies like Coforge, TCS, Wipro, and LTIMindtree.
However, deal bookings remained soft, and discretionary IT spending continues to face pressure. Jefferies prefers Infosys, TCS, and Coforge, citing better positioning in the sector.
CLSA: Cautiously Optimistic
CLSA flagged concerns over weak order books for most Indian IT vendors in the last two quarters, suggesting a loss of ground to Accenture. This implies limited room for guidance upgrades for major players like Infosys and HCL Tech.
The brokerage maintains an Outperform call on Persistent Systems, Tech Mahindra, and Wipro, but downgraded LTIMindtree to Underperform due to lower visibility on large deals.
Morgan Stanley: Positive Sentiment, Limited Clarity
Morgan Stanley observed that Accenture’s Q1 results and outlook could lift sentiment toward Indian IT stocks. However, the brokerage noted no significant shift in demand environment or clarity on 2025 IT budgets, as highlighted by Accenture’s management commentary.
Nuvama: Sector Outlook Positive
Nuvama took a bullish stance, highlighting that Accenture’s guidance upgrade was primarily driven by faster deal execution, which augurs well for Indian IT services companies. The brokerage believes Accenture’s updates often act as a leading indicator for the Indian IT sector, reinforcing a positive outlook.
Disclaimer: The above is for informational purposes only. Please consult a financial advisor before making any investment decisions.
