Fresh concerns are emerging over the growth outlook for Indian IT companies after Accenture reported weaker-than-expected bookings and lowered the upper end of its revenue growth forecast, prompting analysts to warn of a softer start to FY27.
According to brokerage Prabhudas Lilladher, the latest results indicate that delays in large deal closures, slower project ramp-ups and prolonged client decision-making could weigh on demand for technology services in the coming quarters. While Indian IT firms have limited direct exposure to the Middle East, the brokerage said indirect effects from spending delays could become visible in FY27.
Accenture’s third-quarter performance fell short of market expectations. The company reported 3 per cent year-on-year revenue growth in constant currency terms, supported by the Communications, Media and Technology (CMT) segment and the Asia-Pacific region.
The bigger concern came from bookings. Managed services deal wins fell to USD 9.1 billion, down 15 per cent from USD 10.8 billion in the previous quarter. Overall bookings stood at USD 19.3 billion, down 3 per cent year-on-year in constant currency terms.
Consulting bookings remained stronger. They rose 13 per cent year-on-year to USD 10.3 billion.
Delayed deals emerge as key concern
Accenture said disruptions linked to the Middle East conflict affected business during the quarter. The company estimated the impact on revenue at around USD 100 million in Q3 and said disruption is expected to continue in the fourth quarter.
The brokerage noted that several large managed services contracts were not closed during the quarter and have now been pushed into FY27. This, it said, points to longer client decision cycles and growing caution around technology spending.
“For Indian IT services companies, the read-through is incrementally negative as the results suggest a softer start to FY27, with limited direct revenue exposure to the Middle East but potential indirect impact through delayed deal closures, slower project ramp-ups and prolonged client decision cycles,” the report said.
Growth guidance cut adds to demand concerns
Accenture also trimmed the upper end of its FY26 revenue growth guidance. The company now expects growth of 2-4 per cent in constant currency terms, compared with its earlier forecast of 2-5 per cent. The guidance excludes its US Federal business.
Management attributed the revision to continuing uncertainty arising from the Middle East conflict.
Prabhudas Lilladher said the weaker managed services bookings and lower guidance indicate softer discretionary spending by clients. The brokerage expects this trend to translate into a weaker first half for Indian IT companies.
Mid-market push may intensify competition
Apart from demand concerns, Accenture’s latest strategy announcement could also increase competitive pressure for Indian mid-sized IT firms.
The company unveiled a dedicated plan to target mid-market enterprises with annual revenues between USD 300 million and USD 3 billion. Accenture estimates the segment represents a USD 240 billion addressable market.
According to the brokerage, the move could intensify competition for mid-cap Indian IT services companies operating in the same customer segment.