Nomura has provided insights into the IT sector, drawing from Accenture’s latest guidance. For FY25, Accenture expects organic growth between 0-3%, a recovery from the -1% growth seen in FY24. The revenue growth forecast for FY25 is pegged at 3-6%, which includes a 300 basis points contribution from inorganic growth.
The firm’s order bookings continue to be robust, driven largely by major projects. Additionally, the growing opportunity in Generative AI (GenAI) is steadily maturing and is expected to play a significant role in future growth.
Nomura forecasts that growth for the IT sector is likely to bottom out in FY25, offering potential upside for certain stocks. The brokerage recommends a ‘Buy’ on large-cap players such as Infosys (INFO), Wipro (WPRO), and Cognizant (CTSH), as well as mid-cap firm eClerx (ECLX).
However, Nomura suggests a ‘Reduce’ on LTIMindtree (LTIM), Mphasis (MPHL), and L&T Technology Services (LTTS), indicating caution on these stocks moving forward.
