Stock Market Today: Following Accenture's impressive Q1FY25 quarterly results performance that above projections, attention is being paid to Infosys, TCS, HCL Technologies, Wipro, and other IT stocks.
Today's stock market: The share prices of Infosys, Tata Consultancy Services, HCL Technologies, Wipro, and other IT companies are under scrutiny. Accenture's impressive Q1FY25 results performance is probably going to boost investor confidence. At $372.16, Accenture Plc's share price ended the day up 7.03%.Results for Accenture Q1FY25
On Thursday, December 19, the IT behemoth Accenture revealed its first-quarter earnings, surpassing the revenue forecasts made by Wall Street. According to experts, the company saw a surge in demand for its services as a result of clients using AI-powered solutions more frequently.
According to news reports, Accenture's first-quarter revenues of $17.7 billion above analysts' estimates of $17.12 billion.
Analysts at Jefferies India Pvt Ltd stated that Accenture's 1Q sales of $17.7 billion climbed 8.0% year-over-year in constant currency terms, exceeding the recommended range of 2-6% year-over-year growth in constant currency terms. The growth was driven by Managed Services (MS), which rose 11% YoY, and Consulting, which increased 6% YoY thanks to a favorable base and the ramp-up of big transactions.
An advantage of higher growth guidance
Accenture increased its FY25 revenue growth forecast by 100 basis points to 4-7% YoY, which includes acquisitions at a rate of about 3%. Analysts stated that the rise in guidance was primarily due to the first quarter's outstanding performance and the second quarter's high visibility.
According to analysts at Jefferies India Pvt Ltd, significant net hiring combined with lowering utilization indicates increasing revenue visibility even in the face of an unchanged demand environment.
Positives for Indian IT companies are seen by analysts.
According to Nuvama Institutiona Equities, the Acceture's guidance boost is the result of the deals that were won earlier being executed more quickly than anticipated. The Indian IT services industry benefits from improved outsourcing growth. Nuvama continues to have an optimistic outlook on the industry and anticipates that over the next three years, a robust and sustainable demand environment will be supported by prospects presented by Gen AI.
Strong net hiring combined with falling utilization levels suggests that Accenture's revenue visibility is improving, which might also affect Indian IT companies, according to Jeffferies India Ltd.
Companies including Coforge, Tata Consultancy Services (TCS), LTIMindtree Ltd, and Wipro have benefited from the financial services vertical's revenue recovery following four consecutive quarters of contraction or no growth.
According to Jefferies, Nifty IT values at 29.5 time price to earnings, or PE, which are 21% higher than the 5-year average and 49% higher than the Nifty, offer little room for PE multiples to re-rate. Stocks with high profits growth, however, ought to maintain their premium prices. Jefferies favors Coforge, TCS, and Infosys.
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