Accenture's upcoming Q4 results to provide clarity on global technology demand
Demand environment for the global IT industry will receive a factcheck as global IT services leader, Accenture is all set to announce its fourth quarter results (June- August) on September 22.
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Bengaluru, 17 September Demand environment for the global IT industry will receive a factcheck as global IT services leader, Accenture is all set to announce its fourth quarter results (June- August) on September 22.
According to brokerage firms, technology spend by global enterprises is showing signs of weakening in recent months owing to recessionary fears.
With recessionary concerns looming large in the US and Europe, many enterprises are likely to reduce discretionary IT spending in coming months. Globally, technology giants including Google, Microsoft and others are freezing hiring, reflecting an impending slowdown in demand.
Accenture's fourth quarter performance will provide clarity on the current demand environment and will have bearing on the stock prices of Indian IT services players.
Accenture has already guided for below-expectations revenue and profit growth. It has forecast fourth-quarter revenue to be in the range of $15.0 billion to $15.5 billion, compared with analysts' expectation of $15.70 billion.
It has also tempered its fiscal 2022 profit forecast owing to rising inflation and the impact of a stronger dollar on its overseas earnings.
Accenture, which makes more than half of its revenue from outside the United States, has said that a negative foreign-exchange impact of 4.5 per cent in fiscal 2022 is likely as compared with its previous forecast of a 3 per cent forex hit.
Against this backdrop, many brokerage firms have also started downgrading Indian IT companies on the back of slowdown fears.
Recently, Goldman Sachs have downgraded Tata Consultancy Services & Infosys from 'buy' to 'sell' citing a potential slowdown in dollar revenue growth amid recessionary fears in the US and Europe.
"We believe a slowdown in discretionary IT services spend around the growth and transformation agenda will be quite material and something not yet completely reflected in the street's double-digit revenue growth forecast for the industry for FY24," Goldman analysts said in a note.
