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4QFY11 results
Accenture continued to defy sceptics with yet another stellar quarter.
23.4%YY growth in revenues and record quarterly bookings of US$8.4bn
were key positives for the quarter. Economic uncertainty
notwithstanding, Accenture maintained that visibility of business was as
high as last year at least for 1HFY12. While FY12 revenue guidance of 7-
10%YY in constant currency was maintained, organic growth
expectations are lower c.f. 5 months back with acquisitions filling the gap.
Given higher expectations, adverse currency moves and likely macro
issues, an encore of last year looks unlikely for Accenture. That said, its
increasing deal win-rate and solid margin defence will likely keep it ahead
of peers. OPF stays amidst an overall challenging year for outsourcers.
Strong quarter; FY12 revenue growth target maintained
4QFY11 revenue of US$6.69bn, up 23.4%YY beat the top end of company
guidance. Record order booking of US$8.4bn and strong 1QFY12 guidance
(US$6.8-7bn) indicates that business momentum remains strong for
Accenture for now. While FY12 revenue growth guidance was maintained at
7-10%YY (constant currency terms), it now builds in lower organic growth
than assumed earlier. Acquisitions of Zenta and Duck Creek and
consummation of the Nokia deal is picking up the slack from the lower
organic growth. A section of the street has been sceptical on Accenture’s
ability to improve margins. However guidance of 10-30bpsYY improvement in
operating margin for FY12 should address that concern.
Cautiously optimistic commentary on demand trends
While confidence on near-term demand remains high, management tone
seemed a tad cautious c.f. the previous earnings call. Per Accenture, deals are
sitting longer in the pipeline than earlier but the management hasn’t seen any
significant change in client decision making cycles. Accenture has tried to
balance this uncertainty by winning a higher proportion of deals and that
remains a key driver of their superior performance. Accenture had over
US$100m in bookings from 10 of its clients in this quarter, primarily in
outsourcing. Optimistic demand commentary on outsourcing was tempered
by some caution in consulting and Europe.
Better positioned than peers
In our view, Accenture remains the best positioned IT Services provider.
Accenture has strengthened its business in the past few years, cutting
delivery costs while building on its leading position in consulting and systems
integration. Accenture’s willingness to invest in platforms/solutions should
further increase its competitiveness as the game in IT Services shifts away
from labour costs. Stabilisation in the ratio of manpower across high and low
cost locations should aid Accenture’s revenue and margin metrics ahead.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
4QFY11 results
Accenture continued to defy sceptics with yet another stellar quarter.
23.4%YY growth in revenues and record quarterly bookings of US$8.4bn
were key positives for the quarter. Economic uncertainty
notwithstanding, Accenture maintained that visibility of business was as
high as last year at least for 1HFY12. While FY12 revenue guidance of 7-
10%YY in constant currency was maintained, organic growth
expectations are lower c.f. 5 months back with acquisitions filling the gap.
Given higher expectations, adverse currency moves and likely macro
issues, an encore of last year looks unlikely for Accenture. That said, its
increasing deal win-rate and solid margin defence will likely keep it ahead
of peers. OPF stays amidst an overall challenging year for outsourcers.
Strong quarter; FY12 revenue growth target maintained
4QFY11 revenue of US$6.69bn, up 23.4%YY beat the top end of company
guidance. Record order booking of US$8.4bn and strong 1QFY12 guidance
(US$6.8-7bn) indicates that business momentum remains strong for
Accenture for now. While FY12 revenue growth guidance was maintained at
7-10%YY (constant currency terms), it now builds in lower organic growth
than assumed earlier. Acquisitions of Zenta and Duck Creek and
consummation of the Nokia deal is picking up the slack from the lower
organic growth. A section of the street has been sceptical on Accenture’s
ability to improve margins. However guidance of 10-30bpsYY improvement in
operating margin for FY12 should address that concern.
Cautiously optimistic commentary on demand trends
While confidence on near-term demand remains high, management tone
seemed a tad cautious c.f. the previous earnings call. Per Accenture, deals are
sitting longer in the pipeline than earlier but the management hasn’t seen any
significant change in client decision making cycles. Accenture has tried to
balance this uncertainty by winning a higher proportion of deals and that
remains a key driver of their superior performance. Accenture had over
US$100m in bookings from 10 of its clients in this quarter, primarily in
outsourcing. Optimistic demand commentary on outsourcing was tempered
by some caution in consulting and Europe.
Better positioned than peers
In our view, Accenture remains the best positioned IT Services provider.
Accenture has strengthened its business in the past few years, cutting
delivery costs while building on its leading position in consulting and systems
integration. Accenture’s willingness to invest in platforms/solutions should
further increase its competitiveness as the game in IT Services shifts away
from labour costs. Stabilisation in the ratio of manpower across high and low
cost locations should aid Accenture’s revenue and margin metrics ahead.
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