Accenture's performance indicates a potential rebound for the IT industry overall, providing favorable insights for Indian firms.
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Following the release of a strong quarterly results by global IT giant Accenture, economists expect that Indian IT companies to report solid numbers in the next quarters, mirroring the worldwide pattern, ANI reported.
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According to ANI, a report by HDFC Securities suggests that Accenture's performance indicates a potential rebound for the IT industry overall, providing favorable insights for Indian firms.
"Accenture's Q4FY24 results validated signs of improvement for the IT sector" said the report.
The company's Q4 FY24 results have shown significant improvements in the IT industry. As per the report, Accenture's high-end guidance has accounted for a steady macroeconomic conditions and notably, organic growth has swung by four percentage points, from a projected negative 1 percent in FY24 to a projected positive 3 percent in FY25.
This shift points out that the global IT landscape is starting to show signs of recovery, prompted by the need for big deals and outsourcing, ANI reported.
The report according to ANI, noted that this current trend is most likely to benefit the Indian IT companies, which has a special focus on outsourcing and large-scale deals.
Accenture's strong performance in outsourcing, mainly through big contracts, is seen as a positive indicator for IT firms in India that are so heavy dependant on this area for growth.
"The continuity of strong growth in outsourcing driven by large deals can be construed as a positive indicator for Indian IT" added the report.
Outsourcing demand is projected to recover in the coming quarters, allowing Indian IT companies to improve performance.
However, as per ANI, the report also claimed that the growth might not be entirely uniform across the Indian IT sector. It stated that Accenture's development has been mainly driven by public services partnerships, which may be less important to Indian IT companies, which traditionally have a smaller share of this industry.
"The uptick may not be completely secular due to the high share of public services deals by the company" the report noted.
Despite this, the positive trends in other sectors like Communications, Media and Technology (CMT) and a minor recovery in the Banking, Financial Services and Insurance (BFSI) are promising for the Indian IT firms.
In general, the global IT markets are recovering, which is good news for Indian companies. However, how well they can take advantage of these trends and overcome obstacles in particular industries will determine how much bigger their growth will be, ANI reported.
(With inputs from ANI)
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