Accenture cut its FY2026 growth forecast to 3–4%. Kotak says the midpoint implies nil organic growth excluding the Federal business, with managed services bookings below 1x for the first time.
Accenture trimmed its full-year revenue growth forecast to 3–4% from 4–5%, a move Kotak Institutional Equities called “no solace to a sector beleaguered by multiple headwinds.” The brokerage's note lands as the IT services industry waits for a demand turn that keeps getting pushed deeper into the fiscal calendar.
The consulting giant reported $18.7 billion in quarterly revenue, up 5.6% year-on-year in dollar terms and 3% in local currency, landing at the midpoint of its own range. The forward guidance is the problem. Kotak calculates that the 3–4% range implies nil organic growth when the U.S. Federal business is stripped out.
Total bookings fell 3% in local currency. Managed services bookings dropped sharply, and the book-to-bill ratio slipped below 1x for the first time in that segment. Kotak flagged the decline as a concern for the broader market's ability to produce large, sustainable managed services deals.
The West Asia conflict added $100 million in revenue impact during the quarter, split between direct effects on Accenture's operations in the region and indirect spillovers into Europe, the Middle East, and Africa. The war scenario is lengthening decision cycles and delaying sales, the brokerage said.
Discretionary spending remains under pressure. Several large deal opportunities have slid into FY2027 for client-specific reasons, which Kotak called an incremental headwind for the sector.
The brokerage also raised questions about Accenture's recent acquisition push. Its cybersecurity buys and the launch of Accenture Edge target the mid-market, not the large enterprise accounts that typically anchor a services firm's revenue base. Kotak asked whether these moves reflect “desperate measures taken in an increasingly tougher and competitive IT services market.”
Artificial intelligence adoption commentary was the one bright spot. Clients are moving from pilots to production, Kotak noted. The upbeat talk “is not reflected in numbers as of now.”
For Indian IT companies, the message is direct. Kotak said Accenture's results point to continued demand uncertainty, additional geopolitical risk, and no immediate sign of broad-based discretionary spending recovery. TCS, Infosys, Wipro, and HCL Technologies face the same headwinds when they report next quarter.
Accenture currently sits at an AlphaScala Alpha Score of 49 out of 100, a “Mixed” reading that reflects the conflicting signals in its results.
The brokerage's conclusion: no near-term recovery in sight for the sector, and the data from Accenture supports that view.
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