Consulting giant Accenture has raised its guidance for the full fiscal year and second quarter of FY25, sending its share price soaring over 7% in the US markets. This positive sentiment also extended to Indian IT companies, with Wipro and Infosys ADRs gaining 2.3% and 3% in early trading on December 19 at the New York Stock Exchange.
Beating Market Expectations
Despite concerns over currency market headwinds and reduced government spending, Accenture exceeded Wall Street’s expectations, driven by robust demand for AI-powered tools. CEO Julie Sweet highlighted the company’s “strong start to fiscal 2025,” with the GenAI business recording new bookings worth $1.2 billion in Q1FY25.
Accenture’s Q1FY25 revenue reached $17.7 billion, surpassing analysts’ predictions, as reported by Reuters. The EMEA region (Europe, Middle East, and Africa) contributed significantly, with revenue of $6.41 billion, reflecting a 10% year-on-year growth in dollar terms.
Strong New Bookings
Accenture reported impressive new bookings of $18.7 billion in the first quarter, including 30 client deals exceeding $100 million each. Following this strong performance, the company revised its annual revenue growth forecast to 4-7%, up from the previous 3-6% estimate. The second quarter revenue is projected to range between $16.2-16.8 billion.
Dividend Announcement
In addition to its strong earnings, Accenture announced a quarterly cash dividend of $1.48 per share, a 15% increase compared to last year, further enhancing shareholder value.
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Ripple Effect on IT Stocks
Accenture’s upbeat performance and guidance could boost the IT sector index on December 20, which recently experienced a 1% drop due to broader market weakness. Over the past month, the index has seen a modest gain of 1.8%, signaling a gradual recovery.
Positive Outlook for BFSI and Indian IT Companies
In the US, the Banking, Financial Services, and Insurance (BFSI) sector is anticipated to recover gradually, with improved deal closures expected in 2025.
Leading Indian IT firms like TCS, Infosys, and Wipro reportedly witness improved client sentiment. However, Infosys faces a seasonally weak H2FY25, with the fourth quarter expected to be softer than the third.
Conclusion
Accenture’s strong start to FY25, robust AI-driven bookings, and optimistic outlook position it as a key driver for global IT market sentiment. This momentum could positively impact Indian IT giants, fostering a broader recovery in the sector.
