Indian IT stocks, including Infosys, TCS, and Wipro, will be in the spotlight on Friday, December 20, after Accenture reported impressive results for the first quarter of its fiscal year 2025 on Thursday.
Accenture shares surged 7% following the strong results, and this optimism spread to US-listed shares of Infosys and Wipro, which saw gains of up to 4% overnight.
Key Takeaways:
- Jefferies highlighted Infosys, TCS, and Coforge as its top picks within the IT sector. The brokerage noted that Accenture faster-than-expected ramp-up of large deals is a positive indicator for Indian IT firms, especially as strong net hiring and declining utilization suggest better revenue visibility.
- Accenture BFSI (Banking, Financial Services, and Insurance) vertical saw 10% sequential growth, which is expected to have a positive impact on Indian IT stocks like Coforge, TCS, Wipro, and LTIMindtree.
- Citi also expressed a preference for Infosys among Indian IT companies but maintained a “neutral” rating on HCLTech. Despite caution, the brokerage believes the Indian IT sector is witnessing a gradual recovery.
Broker Insights:
- CLSA remains “cautiously optimistic” on the Indian IT space, with an “Outperform” rating on Persistent Systems, Tech Mahindra, and Wipro, but an “Underperform” rating on LTIMindtree.
- The brokerage pointed out that Accenture guidance upgrade is more company-specific and may signal that Indian IT vendors are losing out to Accenture, particularly for large deals. However, there is still potential for some guidance upgrades from Infosys and HCLTech.
- Nuvama remains positive on Indian IT, suggesting that Accenture results are often a leading indicator for the sector. The firm believes the faster execution of deals by Accenture is promising for Indian IT companies.
The optimistic results from Accenture are fueling positive sentiment across the Indian IT sector, even as Indian IT firms face challenges with order book growth and discretionary demand. The market is watching closely for further updates and potential guidance upgrades from Indian IT leaders like Infosys, TCS, and Wipro.
