Recently the stocks of information technology (IT) services companies in India felt the impact when the Indian IT major, shared a disappointing metric in its recent quarterly earnings.
Accenture Quarterly Earnings Release Affecting Indian IT Firms Sentiments
When it comes to Accenture, the IT firm with global operations reported a 6% year-on-year decline in new bookings for its third quarter (March-May 2025) of the fiscal year ended 31 August.
The Dublin-headquartered tech and consulting
major shares dropped 7% on 20 June on the New York Stock Exchange.
The market reacted sharply, when Indian markets opened on 23 June, so the Nifty IT index fell 1.8% intraday, with Infosys, HCL Technologies, TCS and Wipro falling between 1.1% and 2.5%.
It didn’t end there as the reaction further reflected more than just short-term sentiment.
In the case of Accenture, the company is widely seen as a bellwether for Indian IT services firms mainly affected by the timing.
It also offers early signals on demand trends, especially in North America and Europe as the IT firm reports earnings ahead of its Indian peers by two to three weeks.
It also helps the investors and analysts as they use Accenture’s performance metrics—particularly new bookings, revenue by vertical and guidance—to model and forecast demand for the Indian IT sector.
Be it strong or weak it directly influences the tone of the upcoming earnings season hence holds a great significance.
It appears that Indian IT firms including Accenture derive a bulk of their revenues from North America.
Together, these companies serve similar Fortune 1,000 clients across sectors such as banking, financial services, insurance (BFSI), manufacturing, and technology.
Out of these sectors, BFSI alone contributes 30-40% of revenue for both.
So this shared exposure also reflects the shifts in Accenture’s bookings often translated as indicative of broader trends affecting the Indian IT industry.
Accenture Gaining Scale Advantage
So far benchmarking Accenture against Indian IT firms offers useful insights but it also calls for some caution.
Here the most obvious difference is
scale as Accenture reported $17.7
billion in revenue in their respective latest quarters.
This figure is multiple of TCS ($7.5 billion) and
Infosys ($4.7 billion).
Basically, this size advantage gives Accenture more room to invest, a stronger brand, and a better chance at winning large, complex transformation deals.
Structural Differences Between IT Firms
Mostly, structural differences shape how these firms operate especially in terms of profitability.
When it comes to Indian IT firms they typically report higher operating margins: 21-26% for TCS and Infosys, 18% for HCL Technologies, against 16-17% for Accenture.
Basically these gaps stem from workforce strategies as Indian firms maintain a larger share of their employees in low-cost offshore
centres, primarily in India, which helps control delivery costs.
In case of Accenture, in spite of having about 47% of its workforce in India, has a more globally distributed employee base, especially in high-cost markets.
Besides this the key difference is exposure to US government contracts as Accenture derives about 8% of global revenues from this
segment, making it more sensitive to public-sector spending cycles.
On the other hand, Indian IT firms have little to no exposure here, so, federal budget tightening, as seen under the Trump administration, can directly weigh on Accenture’s growth, without affecting its Indian
counterparts.
