TCS, Infosys & other Indian IT stocks rally after Accenture Q3 results

Information technology (IT) stocks rallied on Friday after IT services and consulting giant Accenture released its financial result for the third quarter of 2023-24.

The company, which follows the September-August financial year, has reported a revenue of $16.47 billion in Q3 FY24, as against $16.56 billion in the year-ago period.

Accenture reported new bookings of $21.1 billion in the quarter under review, an uptick of 22% in US dollars. It also reported generative artificial intelligence new bookings of more than $900 million.

The company lowered its revenue forecast for the financial year 2024 because of economic uncertainty leading clients to decrease spending on consulting services.

Accenture's earnings are seen as a lead performance indicator of Indian IT players, and they are keenly observed by IT sector experts and investors. It also indicates the demand for IT services worldwide.

Indian IT stocks rise

NIFTY IT is the biggest gainer among sectoral indices, rising 1.87%. All IT stocks were trading in the green, with Persistent gaining 2.6%, LTIMindtree 2.4%, Coforge 2.37%, L&T Technology Services 2.2%, Infosys 1.8% and Tata Consultancy Services 1.8%.

HCLTech and Tech Mahindra also rose 1.6% and 1.3%, respectively.

While Accenture has narrowed its revenue guidance for fiscal year 2024, experts see the company's quarterly results positively due to an increase in small deals and recovery in consulting growth.

Julie Sweet, chair and CEO of Accenture, said, "We achieved strong new bookings of over $21 billion, up 22% over last year, and continued to accelerate our strategy to be the reinvention partner of choice, with another 23 clients with quarterly bookings of over $100 million, bringing the total of such bookings to 92 year-to-date. We also achieved two significant milestones this quarter -- with $2 billion in Generative AI sales year-to-date and $500 million in revenue year-to-date -- which demonstrates our early lead in this critical technology".

Accenture expects the consulting business revenue growth to be positive in Q4 FY24 following five straight quarters of a year-on-year decline.