Accenture - Global Result Update - Nirmal Bang Institution Desk

Global consulting major Accenture posted a disappointing 0.6% YoY growth in 3QFY13 net revenue (August-ending financial year, 3% growth in constant currency, or CC terms) at US$7.2bn. This was below its guidance of US$7.25bn-US$7.50bn. Consulting revenue fell 2.5% YoY, while outsourcing revenue grew 4.5% YoY.

Accenture's commentary reflects challenges in the business environment, particularly in discretionary spending, with clients holding back spending more than anticipated. Order bookings reflect a greater proportion of long-term projects while short-term projects witnessed a decline - which is likely to result in longer sales cycles going forward - something that could lead to increased volatility in revenue growth. Consulting bookings were down by US$400mn compared with expectations, owing to the change in project profile.

The company downgraded revenue guidance for FY13 further, for the second time, to 3%-4% as against 5%-8% earlier. The poor performance is a negative for Indian information technology (IT) companies, particularly for Infosys in the wake of its greater discretionary revenue exposure.

Source : Equity Bulls

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