Economic Headwinds Hit Tech Industry, Accenture Trims Revenue Growth

Accenture, an IT services firm, decreased its revenue prediction for fiscal year 2024 on 21 March owing to economic uncertainty, which has caused customers to limit their expenditure on consulting services. Accenture's updated view predicts full-year revenue growth of 1 percent to 3 percent, compared to its previous projection of 2 percent to 5 percent. In pre-market trading on the New York Stock Exchange, the company's shares fell by almost 5%.

Accenture's performance is generally recognised as a standard for the Indian IT market

Accenture's performance is generally recognised as a standard for the Indian IT market, offering insight into the expected outcomes for Indian IT firms. The fourth quarter results season begins on 12 April, with bellwether TCS announcing its profits. Given that Accenture's staff is headquartered in India, its findings are frequently used to indicate more significant trends and prospective consequences in the Indian IT sector. The IT behemoth based in Dublin reported $15.8 billion in revenue for the second quarter. Accenture uses a fiscal year that runs from September to August.

Accenture's new bookings were $21.6 billion, a 2% drop. The operating margin rose to 13% from 12.3% in the second quarter of fiscal 2022-23. Last month, competitor Cognizant struggled with top and bottom-line results due to low discretionary expenditure by clients. Geographically, revenue in North America remained steady year on year, while Europe, the Middle East, and Africa climbed modestly by 1%. Other markets fell by one percent in the second quarter of fiscal 2023.

The financial services vertical underperformed

On the verticals front, the largest one climbed by a percentage point to $4.76 billion year over year. Next in line, the Health & Public Service vertical climbed by 10% to $3.33 billion over the same time. However, like with other IT corporations, the financial services vertical underperformed by 6% to $2.81 billion. Accenture's new generative AI bookings were valued at over $600 million throughout the quarter. The corporation presently employs 742,318 people, a 723-person reduction sequentially. Attrition rose by two percentage points, reaching 13 percent.