Stellar numbers by Accenture and what it means for Indian IT

Accenture has a financial accounts reporting year-end in August and has just reported its fourth quarter and full year ended August 2021 i.e. for the Sep-20 to Aug-21 period. The company is predominantly into IT services and consulting.

The company is domiciled in Ireland, but being one of the largest IT services and consulting companies in the world, Accenture sets the tone for other major IT services companies. Nearly one-third of its global manpower is located in India.

For the fourth quarter ended August 2021, Accenture reported 24% growth in top line revenues on YoY basis at $13.40 billion. The company reported 11% growth in diluted EPS at $2.20 for the quarter.

The operating margins for Accenture in Q4 stood at 14.6%, an expansion of 30 bps on a YoY basis. Accenture reported operating cash flows of $2.4 billion and free cash flows (FCF) of $2.2 billion. During the quarter, the company also reported new bookings of $15 billion.

For the full year, Accenture reported revenues up 14% at $50.5 billion while diluted EPS was up 165 at $9.16 per share. For the full year, the new bookings stood at $59.8 billion while the operating margins expanded by 40 bps to 15.1% for the fiscal year ended Aug-21.

Accenture reported 29% growth in consulting revenues for the fourth quarter at $7.31 billion while the outsourcing revenues were up 19% at $6.11 billion. The profit growth in both the segments was largely driven by higher revenues and better operating metrics.

The global benchmarks for Indian IT service companies like TCS, Infosys, Wipro and HCL Tech have been names like Accenture and Cognizant. The solid results signify that corporate IT spending continues to be robust, albeit still strong in the digital arena. It gives optimism that the Indian IT sector can actually better its guidance for the full year.