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IT stocks outperformed in a weak market on Friday after better than expected earnings by US Tech firm Accenture boosted hopes for the Indian IT industry.
IT shares outperformed in a weak market on Friday after better than expected earnings by US technology firm Accenture boosted hopes for the Indian IT industry. The sentiment was also lifted after the IT company raised its full-year sales forecast.
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Accenture has forecast the fiscal year 2021 revenue growth between 4 percent and 6 percent, above its previous estimate of growth between 2 percent and 5 percent. Meanwhile, it expects second-quarter revenue to be between $11.55 billion and $11.95 billion, above the Wall Street estimates of $11.35 billion.
Total revenue rose to $11.76 billion in the first quarter ended November 30 from $11.36 billion a year earlier, beating analysts' estimate of $11.36 billion.
The Nifty IT index was up over 1.5 percent as against a 0.3 percent fall in the benchmarks. All constituents of the index were also trading in the green.
Coforge rose the most, up 2.5 percent followed by Infosys and HCL Tech, up over 2 percent each. Meanwhile, Mphasis, TCS, L&T Infotech, and Wipro also rose over a percent each.
Meanwhile, TCS was also up as the company's Rs 16,000 crore share buyback offer opened for investors on Friday. This is the third share buyback offer from the company after August 2018 and May 2017.
In a recent report, global brokerage firm, Credit Suisse pointed out that pick-up in Accenture's revenue growth and strong bookings augur well for the demand environment.
Infosys and HCL Tech remains its top picks in the sector. It likes Infosys on its industry-leading revenue growth and margin expansion potential. Meanwhile, it is bullish on HCL Tech due to its attractive valuation.
Meanwhile, Motilal Oswal said, “we see Accenture’s 1QFY21 earnings and management commentary as a mere reiteration of the adaptability and resilience of its business model. We continue to form a positive-strand on Indian IT, led by positive trends on higher technology spending’s across global companies."
(Edited by : Ajay Vaishnav)
First Published: Dec 18, 2020 11:23 AM IST