Introduction: Accenture sets the tone for Indian IT
The IT sector began the day on a positive note after Accenture’s impressive Q1FY25 results boosted investor confidence. Indian IT giants like Infosys, TCS, Wipro, and HCL Tech witnessed gains following the global IT leader’s revenue exceeding analyst expectations and its upgraded growth guidance.
Let’s explore how Accenture’s performance is shaping the narrative for Indian IT stocks in FY25.
Also read: Best IT Stocks to Invest in India for 2025
Accenture’s Q1FY25 results: Key takeaways
Strong revenue performance
Accenture reported revenues of $17.7 billion, surpassing Wall Street’s projections of $17.12 billion. This marks an 8% year-on-year growth in constant currency terms, driven by higher demand for AI-powered solutions.
| Metric | Value |
| Q1FY25 Revenue | $17.7 billion |
| Analyst Projection | $17.12 billion |
| Growth YoY (Constant Currency) | 8% |
| New Bookings | $18.7 billion |
Upgraded growth guidance
Accenture increased its FY25 revenue growth guidance to 4%-7%, reflecting confidence in deal execution and sustained demand.
Also read: Wipro Confirms Dec 3 Record Date for Bonus Issue
How did Indian IT stocks respond?
Indian IT stocks quickly reacted to Accenture’s strong performance. On December 20, shares of Infosys, TCS, Wipro, and HCL Tech rose by up to 1% during early trade.
| Stock | ADR Movement |
| Infosys ADR | Up 3.58% to $23.46 |
| Wipro ADR | Up 2.4% to $2.7171 |
Nifty IT index rebounds
The Nifty IT index, which had closed 1.3% lower on Thursday following the Fed’s hawkish commentary, erased losses as optimism around Accenture’s growth guidance lifted sentiment.
You may also like: US Fed Rate Cut Sparks Market Turmoil: Dow Falls 1,100 Points
What’s driving the optimism?
AI as the growth engine
Accenture attributed its growth to the rising demand for Generative AI solutions. Businesses globally are leveraging AI for operational optimisation, predictive analytics, and workflow automation. Indian IT firms, with their strong capabilities in AI and automation, are expected to benefit from these trends.
Better revenue visibility
Jefferies India highlighted that Accenture’s strong net hiring and declining utilisation levels signal improving revenue visibility, a positive indicator for Indian IT companies like Infosys, TCS, and Coforge.
You may also read: Accenture’s Q3 boosts Indian IT stocks: signs of sector recovery?
Stock-specific analysis
Infosys
Infosys’ shares showed resilience, gaining 3.58% on the NYSE. Analysts believe its diversified portfolio positions the company well to capture opportunities in Gen AI and large-scale transformation projects.
Wipro
Wipro’s ADR climbed 2.4%, reflecting investor confidence in its growth trajectory and ability to leverage AI-driven demand.
TCS
Although TCS shares have dropped 3.5% over the past five days, the company remains a preferred choice for its leadership in financial services and consistent deal wins.
HCL Tech
HCL Tech gained up to 1.7%, demonstrating its ability to weather market volatility and capitalise on emerging technology trends.
Broader implications for Indian IT
Leading indicator
Accenture’s performance is often seen as a bellwether for the Indian IT sector. Its guidance upgrade reinforces optimism about technology spending globally, particularly in AI and managed services.
Challenges to watch
High valuations
The Nifty IT index, currently trading at 29.5x PE, is at a 21% premium to its five-year average. This leaves limited room for further multiple expansion.
Fed’s hawkish stance
The US Federal Reserve’s cautious outlook, projecting only two rate cuts in 2025, could constrain client budgets and overall IT spending.
Must read: Best IT Stocks in India for Long-Term Growth
Conclusion: A promising start to FY25
Accenture’s strong Q1FY25 performance has boosted the outlook for Indian IT stocks like Infosys, TCS, Wipro, and HCL Tech. The sector stands to gain from increasing demand for AI-driven solutions, better revenue visibility, and improving global technology spending trends.
While challenges like high valuations and macroeconomic uncertainties persist, the overall narrative for FY25 remains positive. For investors, this may be the perfect opportunity to tap into the growth potential of India’s IT giants.
Indian IT firms continue to prove their resilience, riding global trends while navigating challenges, making them a sector to watch closely.
