Motilal Oswal: Accenture Q4 Review - An Encouraging Outlook, Strong Order Bookings
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Motilal Oswal Report
Accenture Plc’s Q4 FY20 revenue at 10.8 billion U.S. dollar (mid-point of the company’s guidance of 10.6–11.0 billion U.S. dollar) was largely in line with the consensus estimate of 10.9 billion U.S. dollar.
Revenues declined 1% YoY constant currency (including a 2pp impact from reduced travel reimbursements in consulting).
Software, Lifesciences, and Public Services continued to do well, reaching the high-single to low-double digits (YoY).
On the other hand, Communication and banking, financial services and insurance were largely stable - a positive for Indian IT companies.
Health and Public Services (12% YoY, CC) were the biggest growth drivers given the sharp increase in projects such as Covid-19 contact-tracing apps, etc.
Notably, the Healthcare vertical for Indian IT players (Tata Consultancy Services Ltd. – 10%, Infosys Ltd. – 7%, Wipro Ltd. – 13%, and HCL Technologies Ltd. – 14%) is not as big as that of Accenture (19% of revenue).
Accordingly, we maintain a cautious stance on extrapolating this as a positive for the overall Indian sector.
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