Accenture's $18 billion in Q2FY26 sales indicate a steady market for Indian IT

Accenture’s latest quarterly results suggest that while demand in the technology services sector remains stable, revenue growth for software outsourcing companies—particularly Indian IT firms—is likely to remain subdued in the near term, according to analysts.

The Dublin-headquartered company reported revenue of $18.04 billion for the second quarter of FY26, marking a 4% year-on-year increase in constant currency terms and beating market expectations. Despite this, brokerages including ICICI Securities and Motilal Oswal said the results indicate a continuation of cautious client spending trends, similar to those seen in 2025.

Analysts at Motilal Oswal noted that while demand remains steady, external risks such as geopolitical tensions—particularly in the Middle East—could pose additional uncertainty not fully factored into current outlooks. Accenture, which follows a September–August financial year, raised the lower end of its FY26 revenue growth guidance in constant currency terms to 3–5% from the earlier 2–5%, excluding a 1% drag from its US federal business. This translates to an estimated organic growth of 1.5–3.5%, slightly improved from the previous quarter.

The company said its guidance reflects its current assessment of potential geopolitical impacts but does not account for any major escalation or significant economic disruption. At the same time, analysts highlighted that discretionary spending driven by artificial intelligence is beginning to pick up, particularly in consulting engagements.

ICICI Securities pointed out that stronger consulting bookings could intensify competition for Indian IT firms as companies like Accenture position themselves to capture a larger share of AI-led transformation deals. Consulting revenue for the quarter rose 7% year-on-year, while managed services grew 10%, indicating sustained momentum in outsourcing deals. Notably, more than 60% of these deals were fixed-price contracts, increasing the focus on margins rather than traditional headcount-based billing models.

According to DD Mishra of Gartner, the outlook for Indian IT services remains cautiously optimistic but will require significant transformation and agile execution as the industry shifts toward AI-driven and platform-based delivery models.

Sectoral growth for Accenture was led by financial services and communications and media, both of which expanded 9% year-on-year in constant currency terms. The company reported total bookings of $22.1 billion for the quarter, including $10.78 billion in outsourcing deals, up 3.3%, and $11.33 billion in consulting bookings, up 8.2%, reflecting continued client investment.

Karan Uppal of Phillip Capital noted that despite ongoing concerns about artificial intelligence disrupting traditional IT business models, strong booking figures indicate that demand remains intact. However, he added that the growth in consulting-led bookings may reflect seasonal trends rather than a sustained shift.

Following the earnings announcement, shares of Infosys, Wipro, and Tata Consultancy Services rose by up to 3% on the National Stock Exchange of India, before closing with gains ranging between 1.3% and 2.8%, reflecting cautious optimism among investors.