Jefferies has delivered a balanced outlook on Indian IT services after reviewing Accenture’s Q2FY25 performance. The brokerage acknowledged healthy revenue growth in the quarter, with strong momentum in North America and BFSI—two critical verticals for Indian IT firms.
However, Jefferies flagged weak deal bookings and mounting pressure on discretionary and shorter-duration deals as potential red flags. These trends may impact near-term project pipelines and billing visibility.
Accenture’s revised FY25 revenue growth guidance of 5–7% now implies a soft 2–4% constant currency growth for 2HFY25. Jefferies warned this could create downside risks for FY26 growth estimates for Indian IT companies, especially if large digital transformation projects remain on pause.
Despite the concerns, the brokerage remains confident in select names:
- Infosys and TCS among large-cap IT stocks.
- Coforge as a preferred pick in the mid-cap space, given its execution track record and differentiated offerings.
Jefferies’ view aligns with a broader theme of recovery in core IT services but caution on discretionary spend-led demand.
Disclaimer: This article is for informational purposes only and is not a recommendation to buy or sell any stock. Please consult a certified financial advisor before making investment decisions.
