Key Points:
- Accenture Q1 results exceeded estimates on strong bookings and AI-led demand, boosting Indian IT stocks and improving sector sentiment.
- Revenue rose 6% year on year to $18.7 billion, with margins and earnings supported by operating efficiencies and higher-value services.
- A steady outlook and strong AI adoption have reinforced confidence in a gradual recovery for Indian IT firms into 2026.
Indian IT stocks rose in early Friday trade after Accenture Q1 results beat first-quarter estimates overnight, posting strong bookings and margins, reinforcing optimism around AI-led spending and improving sentiment for the sector.
Accenture Beat Fuels Early Gains in Indian IT Shares
Indian information technology stocks opened higher Friday after Accenture Plc reported better-than-expected first-quarter results late Thursday in the United States, signaling steady global demand for technology services.
Shares of Tata Consultancy Services, Infosys, HCL Technologies and Tech Mahindra traded in the green in early deals, tracking positive cues from the global IT bellwether. Market participants cited Accenture Q1 results, particularly robust bookings and margin expansion as supportive for near-term sentiment.
The Nifty IT index is among the top monthly gainers, rising 4.2% so far in December, according to exchange data. Investors are positioning for sustained deal activity, aided by a weaker rupee and increased enterprise spending on artificial intelligence.
Accenture’s performance “demonstrates continued client commitment to large-scale transformation programs,” the company said in its earnings statement, highlighting strong demand across industries.
Strong Bookings and Margins Drive Quarterly Outperformance
Accenture reported revenue of $18.7 billion for its first quarter of fiscal 2026, representing year-on-year growth of 6% and landing at the upper end of the company’s guidance, according to Accenture Q1 results.
Adjusted earnings per share rose 10% from a year earlier to $3.94, supported by operating margin expansion of 30 basis points to 17%, well above the guided 15.9%. New bookings climbed 12% year on year to $21 billion in U.S. dollar terms.
“The quarter reflects disciplined execution and continued focus on high-value work,” Accenture said, adding that margin improvement was driven by operating efficiencies and a favorable mix of services.
The company also declared a quarterly dividend of $1.63 per share, reinforcing confidence in cash generation and balance sheet strength.
Advanced artificial intelligence offerings were a key growth driver. Advanced AI bookings reached $2.2 billion, doubling from the same quarter last year, while AI-related revenue stood at $1.1 billion.
Management said demand for AI-led transformation projects remains broad-based, spanning cloud modernization, data platforms and industry-specific solutions.
Positive Outlook Strengthens Confidence in Sector Recovery
Looking ahead, Accenture forecasts full-year revenue growth of 1% to 5% in local currency terms. Excluding an estimated 1% impact from U.S. federal services, growth is expected to range between 3% and 6%.
Operating margin for the full year is projected between 15.7% and 15.9%, representing an improvement of 10 to 30 basis points, the company said.
Accenture also highlighted ongoing talent rotation and plans to increase headcount across the United States and Europe through the year to support demand. “AI is now embedded across our core offerings,” management said, adding that the company will no longer report AI metrics separately starting next quarter.
Analysts say the outlook from Accenture Q1 results bodes well for Indian IT exporters, which derive a significant share of revenue from North America and Europe. “Accenture’s commentary suggests deal momentum is stabilizing, which is constructive for Indian peers,” said a Mumbai-based IT sector analyst at a domestic brokerage.
While near-term macro risks remain, including client budget scrutiny, investors are betting that AI adoption and currency tailwinds will support earnings resilience for Indian technology firms into fiscal 2026.
