IT stocks jump after Accenture delivers impressive Q3 numbers

Shares of nine IT firms rose by 1.5% to 5.7% after IT services major Accenture Plc. reported steady performance for the quarter ended May.

Infosys (up 6.53%), MindTree (up 5.71%), TCS (up 4.67%), Oracle Financial Services Software (up 4.3%), Wipro (up 3.73%), MphasiS (up 3.02%), HCL Technologies (up 2.76%), Persistent Systems (up 2.63%) and Tech Mahindra (up 1.54%) advanced.

The Nifty IT index was up 4.05% at 14,994.35, outperforming other sectoral indices on the NSE.

Meanwhile, the benchmark Nifty 50 index was up 77.15 points or 0.75% to 10,366.05.

Accenture's revenues for the third quarter of fiscal 2020 were $11.0 billion, compared with $11.1 billion for the third quarter of fiscal 2019, a decrease of 1% in U.S. dollars and a 1.3% increase in local currency. Revenues for the quarter reflected a foreign-exchange impact of approximately negative 2.5%, compared with the negative 1.5% impact the company had previously assumed.

Adjusting for the actual foreign-exchange impact, the company's guided range for quarterly revenues was approximately $10.65 billion to $11.05 billion. Accenture's third quarter fiscal 2020 revenues were in the top end of this adjusted range.

Outsourcing revenues were $5.0 billion, an increase of 3% in U.S. dollars and 5% in local currency compared with the third quarter of fiscal 2019. Diluted earnings per share (EPS) for the quarter were $1.90 compared with $1.93 for the third quarter last year.

The company's new bookings for the third quarter were $11.0 billion, an increase of 4% in U.S. dollars and 6% in local currency from the third quarter last year. Outsourcing new bookings were $4.8 billion, or 44% of total new bookings.

"Accenture expects revenues for the fourth quarter of fiscal 2020 to be in the range of $10.6 billion to $11.0 billion, or negative 3% to positive 1% growth in local currency, reflecting the company's assumption of a negative 1% foreign-exchange impact compared with the fourth quarter of fiscal 2019.

Accenture's business outlook for the full 2020 fiscal year continues to assume that the foreign-exchange impact on its results in U.S. dollars will be negative 1.5% compared with fiscal 2019.

For fiscal 2020, the company now expects revenue growth to be in the range of 3.5% to 4.5% in local currency, compared with 3% to 6% previously, the global IT gaint said.

A domestic brokerage reportedly stated that Accenture did not face significant cancellations or pricing pressure. It added that work from Home (WFH) transition was smooth and had a very little revenue impact.

Accenture is a global management consulting, technology services and outsourcing company, with more than 513,000 people serving clients in more than 120 countries.

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