Accenture Q4 Review: Cautious FY26 Guidance To Weigh On Indian IT Stocks, Brokerages Say
Despite a notable pick-up in Generative AI projects, Accenture’s forward-looking statements suggest that their projects are not yet driving a increase in overall IT services budgets.
Brokerages including Jefferies and Goldman Sachs, warn that Accenture’s latest muted growth guidance will likely weigh on the Indian IT services sector, posing downside risks to consensus expectations for accelerated growth in the fiscal year 2027.
Despite a notable pick-up in Generative AI projects, Accenture’s forward-looking statements suggest that these projects are not yet driving a increase in overall IT services budgets, leading to sustained softness in discretionary spending.
Accenture reported financial results for the fourth quarter and full fiscal year ended Aug. 31, 2025, with revenue rising 7% year-on-year to $17.6 billion, above the Wall Street estimates of $17.38 billion, driven by resilient demand from enterprise clients for its AI-driven consulting and services. Shares of the Dublin-based tech giant were up 3.7% in volatile premarket trading.
Jefferies notes that the organic revenue growth outlook suggests a steady-to-moderating pace for the next fiscal year, which challenges the widely held belief that Indian IT firms will see a sharp acceleration in financial year 2027.
Similarly, Goldman Sachs points out that its revenue growth expectation for India IT for the 12 months ending September 2026 is not materially different from Accenture's financial year 2026 guidance. This implies that the full-year FY27 revenue growth estimate of 6.1% year-over-year could be at risk if there is no significant improvement in discretionary demand.
Citi reinforces this caution, expecting financial year 2026 to be the third consecutive low-growth year for the industry due to factors like AI disruption, the rise of Global Capability Centers, and increased competitive intensity.
Pockets of Strength: Financial Services and Cost Takeout
Despite the overall cautious guidance, analysts identified clear areas of resilience. Financial Services was highlighted as Accenture's best-performing vertical, growing 12% year-over-year in the fourth quarter of fiscal year 2025 in constant currency terms.
This is a crucial, as Indian IT services firms, particularly TCS, have a higher exposure to this vertical compared to their large-cap peers. Both Macquarie and Citi emphasise that the strong growth in Financial Services is a positive sign for Indian firms.
Further, Macquarie noted that Accenture’s bookings showed Managed Services performing better than Consulting. This indicates that clients are still focused on cost takeout projects rather than large-scale transformation initiatives, a trend that typically benefits major Indian IT players.
Gen AI and Competitive Edge
The brokerages see the Gen AI opportunity maturing gradually. While Gen AI bookings for Indian IT companies saw a sharp rise from $3 billion in financial year 2024 to $5.9 billion in financial year 2025, the impact on near-term revenue growth remains limited.
Citi and GS suggest that while Gen AI pricing may be accretive to Accenture’s overall average, the commentary from Indian IT firms on pricing needs to be closely monitored.
Nomura provides a critical distinction, noting that Accenture’s financial year 2026 revenue growth guidance includes a negative 1-1.5% impact from its US federal business, an area where Indian IT companies have no exposure, thus offering a slight buffer.
Investec echoes this view, arguing that the Accenture results contain "nothing negative" for Indian IT, merely highlighting an acceleration in demand compared to the prior year. Overall, a significant sector-wide growth revival remains contingent upon a sharp macroeconomic improvement, particularly in the United States.
