Nifty IT experienced sharp fluctuations in Friday’s trade following Accenture’s fiscal second-quarter results, widely seen as a benchmark for Indian IT companies. The index initially slipped nearly 3%, touching an intraday low of 35,674.4, before swiftly recovering to trade with a slight gain of 0.089% or 32 points at 36,709.
Accenture reported a net profit of $1.788 billion for the December-February quarter, reflecting a 6.8% YoY increase. Revenue for the period stood at $16.659 billion, up 5.4% in dollar terms, meeting market expectations on both top-line and bottom-line fronts. However, the Dublin-based firm flagged concerns over reduced government spending, creating cautious sentiment around future demand.
Despite this, Accenture raised the lower end of its full-year revenue guidance, offering some reassurance to investors.
Brokerage Views on Indian IT Stocks Post Accenture Results
Top global brokerage firms, including Nomura, CLSA, Citi, Jefferies, and HSBC, noted that Indian IT companies have limited exposure to US Federal contracts, minimizing potential negative impacts from reduced government spending. They emphasized that only Accenture derives nearly 8% of its revenue from this vertical, reducing direct implications for Indian players.
Nomura remains optimistic about the sector’s long-term recovery, citing an anticipated increase in discretionary spending in the upcoming fiscal year. Additionally, AI and cloud migration trends are expected to fuel significant growth in Indian IT companies moving forward.