Covid-19 fallout: Accenture’s cut in revenue growth guidance spells trouble for Indian IT firms

Lowering of fiscal 2020 revenue guidance to 3-6 per cent by IT major Accenture could ring alarm bells for Indian software exporters such as TCS and Infosys.

In fiscal 2019, Accenture lowered its revenue growth guidance and earnings outlook for FY20, stating that the uncertainties on demand emanating from the Covid-19 outbreak and revenues are expected to come up in the May 2020-ended quarter. For FY20, Accenture expects revenue growth to be in the 3-6 per cent range y-o-y, compared to the earlier guidance of 6-8 per cent. This is in constant currency.

Demand may suffer

Indian IT companies have been reporting growth in the range of 7-8 per cent and Accenture’s revenue guidance cut confirms fears about a possible hit to revenue growth for Indian tech companies in H1FY21 due to global growth scare and potential reset to client situations.