Accenture’s FY21 growth should be similar to pre-covid levels: ICICI Securities

Global technology major Accenture’s FY21 growth should be largely similar to pre-covid levels adjusted for a bit of base shift, ICICI Securities said in a report.

Accenture, which follows a September-August financial year, raised its full-year revenue growth guidance for FY21 to 6.5-8.5% in local currency terms, up from 4-6% previously, as the business outlook gradually improves.

Revenues for the second quarter ended February stood at $12.09 billion, an increase of 8% in US dollars and 5% in local currency, compared with the same period last year on broad-based growth across verticals and geographies.

Accenture chief executive Julie Sweet said during the earnings call that the company has returned to overall pre-pandemic growth ahead of expectations, while continuing to take market share faster than before the pandemic.

“We have seen another quarter of strong, broad-based demand for our services across geographies and industries, and delivered record new bookings as well as excellent profitability and free cash flow,” Sweet said.

Given Accenture’s low growth guidance in the previous quarter, the earnings for the quarter ended February and guidance revision were “unsurprising”, according to ICICI Securities.

“While Accenture’s recent strength in outsourcing has often been perceived as the lead indicator for Indian IT by consensus, it needs to be seen whether it is coming at the expense of market share consolidation,” the brokerage firm said.