IT stocks rise on positive read-through from Accenture results

MUMBAI: Shares of Indian IT companies were among the top sectoral performers in trade as strong Accenture results raised hopes of better business environment.

“Accenture declared 3QFY14 results (its FY ends in August) that have a positive read-through for Indian IT companies on the back of a disappointing quarterly performance in new license sales reported by Oracle last week,” said Macquarie report.

The company guided to 4QFY14 revenues of US$7.45 billion to US$7.7 billion. The company raised the lower end of its full-year FY14 (year-end August) revenue growth target to 4-5 per cent and raised the new bookings guidance for FY14 towards the higher end of the US$33 billion -US36 billion band.

“The April- June quarter tends to be strong seasonally for Indian IT companies. Indian IT managements have been talking about FY15 seeing stronger growth than FY14. The strong outsourcing revenues and new order bookings from Accenture are positive data points to that end,” the report added.

After sharp run-up in cyclicals, investors are seen churning portfolios to defensives such as IT companies. A weak rupee and improving global economic environment is likely to provide support to Indian IT companies.

TCS surged 3.40 per cent, Wipro was up 2.21 per cent, Infosys inched 0.90 per cent higher, HCL Infosystems rallied 4.52 per cent, HCL Technologies gained 3.02 percent and Tech Mahindra was 2.81 per cent higher.