DBT Bureau
Bengaluru, 20 December 2024
Global IT services & consulting firm, Accenture reported a sound first quarter (Q1 FY25) performance. The Dublin-headquartered IT firm raised its FY25 constant currency (CC) revenue growth guidance to 4 – 7% from 3 – 6% earlier.
For its first quarter 2025 ended November 30, Accenture reported revenue of $17.69 billion, up about 9% over the $16.22 billion the company a year ago.
Out of the total revenue, $9.05 billion came from consulting, an increase of 7%, while $8.64 billion came from managed services, up about 11%.
Such performance augurs well for Indian IT services companies as Accenture’s managed services segment’s results are seen as a benchmark for future performance for Indian companies.
Higher ramp up of deals: IT firms have been reeling under low revenue conversion from their deal pipeline for quite some time. However, Accenture indicated that things have changed and revenue conversion is improving due to higher ramp up of deals. This brings good news for Indian IT firms, which have reported strong deal pipeline in recent quarters.
Better prospects in BFSI vertical: The banking, financial services & insurance (BFSI) vertical has shown uptick since the July-September quarter. It seems this trend is gaining further momentum as reflected in Accenture’s performance. This is likely to support growth of big Indian IT firms like TCS, Infosys, HCLTech, Wipro apart from mid-tier firms including LTIMindtree and Mphasis among others.
Demand environment may improve: Demand environment has not changed in the IT outsourcing industry for the last two years. However, Accenture’s increased guidance for fiscal 2025 may point towards this situation changing for better in coming quarters. It has to be seen how the President-elect of US, Donald Trump’s policies will impact the technology industry as a whole as any reduction in tax rates will support technology spending among Indian enterprises.
Sound GenAI deals: Accenture secured $1.2 billion in generative AI (Gen AI) bookings in the quarter-ended November 2024. Its order book on GenAI touched $4.2 billion since September 2023. This raises hope for Indian IT industry, which may see more revenues coming from the new technology space.
Robust hiring: Accenture said a major portion of its 24,000 new recruits were from India. Usually, sound headcount addition is seen as a precursor to better demand environment. Therefore, Indian IT industry is likely to follow suit with higher number of hiring in coming quarters.
