Infosys, Tata Consultancy Services (TCS), HCL Technologies, Wipro, and other IT stocks are likely to attract significant attention following Accenture impressive Q1FY25 earnings report, which surpassed Wall Street expectations. The positive results are expected to boost investor confidence in the IT sector, with Accenture share price climbing 7.03% to $372.16 after the announcement.
Accenture Q1FY25 Performance Exceeds Expectations
Accenture first-quarter revenues reached $17.7 billion, outperforming analyst forecasts of $17.12 billion. The company saw a notable increase in demand for its services, particularly due to the growing adoption of AI-powered solutions by its clients. The company year-on-year revenue growth stood at 8.0% in constant currency, surpassing the projected range of 2-6%. This growth was driven by the ramp-up of large deals and a strong performance in Managed Services, which grew by 11% year-on-year.
Positive Outlook with Raised Growth Guidance
Accenture decision to raise its full-year FY25 revenue growth guidance by 100 basis points to 4-7% year-on-year is seen as a positive signal for the industry. The new growth outlook includes about 3% from acquisitions and reflects strong visibility for the second quarter. Analysts believe that despite the ongoing stable demand environment, Accenture net hiring and declining utilization rates point to improved revenue visibility moving forward.
IT Sector Gains Expected
The stronger-than-expected results from Accenture, along with its raised growth guidance, are expected to positively impact the broader IT sector. Investors will be keeping an eye on major Indian IT stocks, including Infosys, TCS, HCL Technologies, and Wipro, as Accenture performance could indicate a favorable trend for these companies as well.
