Thursday, October 2, 2025
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Should Indian IT companies worry after Accenture 2023 growth guidance?

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The Accenture results have more positives than negatives for the Indian IT industry. The company reported financial results for the second quarter of fiscal 2023, which ended on February 28, 2023.

The company reported revenues of $15.8 billion, an increase of 5% in U.S. dollars and 9% in local currency over the same period last year.

Earlier, Morgan Stanley reports suggested that more than the BFSI worries, a slowdown in hi-tech and communication verticals in North America came up as a bigger negative.

The slowdown in North America and the hi-tech and communications verticals were negative. The results had more positives than negatives for Indian IT vendors.

However, the impact can be seen in both of the IT providers, TCS and Infosys. By end of March 24, 2023, TCS’s market cap is over Rs. 11.42 lakh crore, and Infosys’ valuation is near Rs. 5.73 lakh crore.

They reiterate Infosys and TCS with ~28%/22% potential upside, as the top picks. TCS and INFY fell ~8-11% in the last month and are trading at attractive multiples of 20.5x/19x on FY25E EPS.

An earlier report suggested that the regional banks in the US account for 2-3 percent of their total revenue. However, TCS, Infosys, and Mindtree may have an exposure of 10-20 basis points to the recently sunken Silicon Valley Bank.

The earlier report suggested Indian IT players like Tata Consultancy Services (TCS), Infosys, Wipro, HCL Technologies, Mphasis, and LTIMindtree have exposure to some of the troubled banks.

According to a Mint report, ICICI Securities analysts in their note said, “there is a significant cut to ACN’s organic growth guidance, with mid-point of guidance maintained, despite concerns in BFSI sector due to crisis of confidence across US and Europe.”

“We believe that recent events in the global BFSI space may not lead to more than 2-3% EPS cut for our covered companies vs a fall of ~9% in NIFTY IT in the past month”, the note added.

The company’s GAAP operating income was $1.94 billion, compared to $2.06 billion for the second quarter of last a year and the operating margin was 12.3% compared to 13.7% for last year’s second quarter. The adjusted operating margin was 13.8%, an expansion of 10 basis points from the second quarter of fiscal 2022.

The GAAP diluted earnings per share were $2.39, compared to $2.54 for the second quarter of last year. Adjusted EPS was $2.69, an increase of 6% from the second quarter of fiscal 2022.

The new bookings for the quarter were a record $22.1 billion, with consulting bookings of $10.7 billion and managed services bookings of $11.4 billion.

Accenture announced it lay off 19,000 people which is 2.5% of its global workforce in the next 18 months. The company has over 300,000 employees in India.

According to media reports, layoffs in Accenture in India may impact around 7000 employees. These numbers may vary depending on Accenture’s business performance in India.

Chief Financial Officer KC McClure said nearly half of these layoffs will be in FY23, or before August 31. The company expects to incur $1.2 billion in employee severance and other personnel costs — $500 million in FY23 and $700 million in FY24.

The Accenture net headcount addition quarter-on-quarter has remained flat. The company currently employs 7,38,000 employees. Additionally, voluntary attrition was down to 12 percent from 13 percent in the same period. The net headcount addition will trend similarly in Q3 and there may be additions in Q4.

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Sheenu Pradhan
Sheenu Pradhanhttps://sightsinplus.com/
Sheenu Pradhan, Editor Content, SightsIn Plus. She has over 8 years of experience in human resources. Prior to this, she has been associated with Wictor Chemicals India, Wipro, and Shakti Plas Industry.