A muted guidance given by global software giant Accenture for its next financial year has raised doubts over Indian IT companies posting a double-digit growth in the coming quarters.
Accenture gave a much lower revenue guidance of 5-8% for its financial year ending August 2016 compared to its revenue growth of 11% recorded in the previous year.
Following the Accenture's guidance, domestic IT stocks came under selling pressure on Monday, with the sectoral IT index falling by 1.3%.
While the stock prices of Infosys fell by more than 3% on the Bombay Stock Exchange (BSE), Wipro shares ended 1.7% lower.
"This is a likely overhang for the industry, which may not be show-cased in the near term performance. But going forward, the performance of Indian counterparts too may get more uncertain, considering the dual volatility of macro and short-cycles of digital projects," domestic brokerage Motilal Oswal told NDTV Profit.
"The guidance is a sentiment negative for Indian IT," said Religare.
However, Accenture's earnings rose more-than-expected in its fourth quarter to $7.9 billion, up 12%. Overall, the company posted a revenue of $31 billion for its fiscal year ending 31 August, 2015. Accenture's revenue figure is twice that of India's largest IT firm TCS's earnings in the financial year ending March 2015.
An increase in Accenture's revenue was largely led by a 35% growth in Digital vertical, which accounted for nearly $7 billion of its total income.
"The company invested $800 million in 11 acquisitions during the quarter to scale up capabilities in key growth areas. FY16 guidance assumes 2 per cent contribution from inorganic initiatives," said Rumit Dugar and Saumya Shrivastava from Religare.
