Accenture’s latest quarterly earnings showed a 5.8% drop in revenue from the previous quarter, prompting concern across India’s IT sector. The global consulting firm reported $16.66 billion in revenue for the quarter, citing delays in decision-making and slower discretionary spending—particularly among U.S. government clients.
Given Accenture’s role as a bellwether for global IT demand, the results have raised flags ahead of upcoming earnings reports from India’s largest IT services companies. But industry experts say the impact on Indian firms may be limited.
“Uncertainty in the market is causing a delay in some decision-making as firms wait to get more clarity on the impact of the new policies,” said Namratha Dharshan, Chief Business Leader at India Research, ISG. “To date, it appears that smaller IT and business services deals will feel the effects more than larger deals, which are more likely to be driven by existing cost optimisation goals.”
DD Mishra, VP Analyst at Gartner, said the long-term outlook may still be positive. “The demand for operational efficiency and optimisation is likely to rise, providing room for continued transformations,” he said. “There will be an impact of these changes on the various systems leading to some opportunities that can also be leveraged.”
Analysts agree that Indian IT firms with strong cost-efficiency offerings and global delivery models may be positioned to weather the turbulence—and possibly benefit from clients seeking to optimize budgets. But the US government, who is a major purchaser of consulting and outsourcing services remains a big unknown, particularly in non-defence related consulting. As well, the impact of “American first” purchasing on Indian firms remains a big unknown.
