IT giant Accenture reports strong results in second-quarter for FY22

IT giant Accenture reports strong results in second-quarter for FY22

Accenture, the Dublin-based IT consulting firm, has announced its second-quarter results for the fiscal year 2022, wherein it reported revenue income of around $15 billion, recording a growth of 24% year-on-year in terms of dollars and 28% in local currency.

It also witnessed a record order inflow at 19.6 billion dollars, rising to 26% yearly in local currency.

However, the thing that surprised the market was how Accenture has taken a sharply increased revision in revenue guidance.

The company now expects revenue growth in the range of 24-26% in local currency for the financial year 2022, up from 19-22% compared to the last quarter.

It had frozen revenue growth between 12-15% at the start of the financial year.

According to analysts, Accenture's strong revenue growth is headed by broad-based demand powered by accelerated cloud and digital transformation, which is positive for India's IT industry.

The rise in FY22 growth guidance, despite the uncertainty from the Russia-Ukraine conflict, further jots the hopes of a solid order pipeline.

Motilal Oswal Financial Services cites that the positive commentary of Accenture designates a healthy pipeline and robust spending in areas of cloud, digital, security and Web 3.0. Only 30% of the workload is on the cloud, and hence the fast adoption of the cloud will offer further prospects for IT companies and offer a sustained demand environment.

It further said that with Accenture's ability to increase guidance over the quarters, its Indian IT services contemporaries would diligently watch for its commentaries on FY23 as the growth expectations heighten.

However, as per sources, despite the numbers provided by Accenture look impressive, they could have a negative impact for its counterparts based in India. For instance, Accenture has been nabbing record order wins in large size segment, while IT companies in India are aiming on mid and small-order sizes.

Accenture has also witnessed budding market share profits in FY20-FY22 compared to TCS and Infosys and has been eyeing industry growth of up to 3 times in recent times compared to two times in the past.

Source Credit - https://www.business-standard.com/podcast/markets/accenture-s-q2-result-raises-red-flags-for-indian-it-122032200080_1.html