A c c e n t u r e: A sweet foretaste
• Accenture delivered a strong 4QFY10 with revenues at the topend
of its guidance (US$5.4bn, 5% YoY) and re-emphasised the
robust demand environment. Guidance for FY11 at 7% to 10%
YoY (constant currency) is strong and implies acceleration in
revenue growth.
• Growth in 4QFY10 was diversified and broadbased with all major
verticals registering a 7% to 16% YoY growth (constant
currency). BFSI and products practices performed strongly with
14% and 16% YoY revenue growth (constant currency)
respectively.
• Signs of a pickup in discretionary spending are also evident in its
order book. The more discretionary ‘consulting’ orders were 54%
of its 4QFY10 new bookings.
• Our channel checks indicate that attrition, though still high, has
been on the wane at Indian vendors. Indications of this can be
seen at Accenture, where attrition after increasing from 8% to
17% over the past year has been stable in 4QFY10.
• For Indian vendors, we expect a strong 2QFY11 with 6.5% to
7.5% US$ QoQ revenue growth across the top-tier vendors.
• Also, after nearly four quarters of better EBITDA growth at TCS
(vs Infosys), we expect Infosys to report materially stronger
EBITDA growth (15% QoQ vs 8% at TCS) in 2QFY11 on higher
revenue growth and strong margin expansion.
• Infosys and HCL Tech remain our top picks in Indian IT services.
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