Following the financial results of the May quarter for the multinational IT giant Accenture, IT stocks are anticipated to be in focus on Friday, June 21.
Accenture announced $16.5 billion in sales for the quarter ending on Thursday, as Mint reported. This represents a 1.4% growth in local currency and a 1% decline in US dollars.
With an estimated 2–6% local currency growth, Accenture projects revenues for the fourth quarter of fiscal 2024 to be between $16.05 billion and $16.65 billion. This estimate reflects the company's assumption of a roughly 2% negative foreign exchange impact when compared to the fourth quarter of fiscal 2023.
Investors and professionals in the IT sector closely follow Accenture's profits as a performance indicator of Indian IT firms. It also shows how much demand there is for IT services globally.
After the Covid-19 epidemic boost, the Indian IT sector has been under pressure for the past two years.
In the past two years, the Nifty IT index has increased by around 30%, while the Nifty 50 has increased by 54% within the same time frame.
Nonetheless, the performance difference has closed throughout the past 12 months. Over the past year, Nifty 50 has increased by 25% and Nifty IT by 21%.
Since last year, stocks like Persistent Systems (up 57%), have increased significantly.
Significant gains have also been made in stocks like Mphasis (up 29%), Wipro (up 28%), Tech Mahindra (up 26%), HCL Tech (up 24%), and L&T Tech (up 23%).
TCS (17%), Coforge (17%), Infosys (16%), and LTIMindtree (0.6%), on the other hand, have underperformed the IT index.
"We persist with our ‘underweight’ stance on the IT sector as we believe that we are in a ‘slower for longer’ demand environment, and the risk is for current consensus estimates to be cut rather than raised," stated Nirmal Bang Institutional Research.
