Accenture’s latest results did more than beat Wall Street’s estimates. They threw the spotlight straight onto India’s $250-billion IT services industry. The global giant reported $17.6 billion in revenue for the fourth quarter of FY25, at the upper end of guidance, with new bookings of $21.3 billion and a record $1.8 billion in generative AI deals for the quarter. However, loss of US Federal Government business shaved 20 basis points off annual growth and 150 basis points off Q4 growth. What does it mean for the Indian IT sector? Brokerages highlighted key concern areas.
Three research notes released by Nuvama Institutional Equities, JM Financial, and Nomura offered a concerted opinion. All three agreed on a few essentials:
-Demand for IT services remains steady rather than booming
-Managed services are still the heart of large deals but competition is intensifying
-Generative AI is no longer just hype, it is already a multi-billion-dollar revenue line.
However, that’s where the common points ended. Where they diverged was in emphasis Nuvama calling the read-through for Indian IT “neutral”, JM Financial highlighting demand stability but warning of margin pressure, and Nomura stressing that Indian firms enjoy one advantage: they are spared the 1–1.5 per cent revenue headwind from U.S. federal contracts that Accenture has already flagged for FY26.
Nuvama: Neutral on tech sector, but AI cannot be dismissed
According to Nuvama Institutional Equities, ”the message for Indian IT was restrained: Decent Managed Services performance; neutral for Indian IT.”
Nuvama did not call the results a clear positive for Indian IT. The brokerage said weak macro conditions would keep near-term growth in check, even though outsourcing demand looked firm. Instead, the brokerage shifted attention to the structural story.
It emphasised Accenture’s sheer scale in artificial intelligence (AI), $2.7 billion in GenAI revenue in FY25 tripling year-on-year (YoY), $5.9 billion in GenAI bookings, and a 77,000-strong data and AI workforce. With more than 550,000 employees trained on GenAI, Accenture has positioned itself as a front-runner in AI-driven services. For Indian IT firms, Nuvama argued, this represents the real battleground: the near-term read is neutral, but over the medium term the ability to invest, train, and scale in AI will decide competitive positioning
JM Financial: Demand stable, but watch out for margins
JM Financial emphasised on stability as the key message from Accenture’s earnings. The brokerage quoted management directly: “Accenture has not seen any meaningful change in demand either positive or negative across its 9,000 clients. That should lend some stability to current estimates for India IT Services.”
In other words, Indian IT companies can take some comfort that client spending is holding up, at least for now. Still, JM warned that the outlook for managed services needs close watching. Accenture’s outsourcing revenues grew 6 per cent in constant currency to $8.82 billion in the quarter, but if growth in this segment slows, Indian vendors heavily dependent on such contracts may feel the squeeze.
Margins were another sore point: gross margin slipped 65 basis points year-on-year (YoY) to 31.9 per cent, while adjusted earnings before interest and taxes (EBIT) margin was 15.1 per cent. Reported margins, however, were pulled down by $615 million in charges linked to a broader $865 million optimisation programme. The note also highlighted workforce dynamics: Accenture’s headcount shrank by more than 11,000 in Q4 to 779,273, though utilisation stayed high at 93 per cent and attrition hovered around 14–15 per cent. JM treated these as important benchmarks for Indian IT investors to track.
Nomura: Sharp growth hinges on US
Nomura expects the growth momentum in the financial services vertical to continue in the near-term for Indian IT services companies. “However, a sharp growth revival hinges on macroeconomic improvement,particularly in the US,” they added.
On AI, Nomura emphasised that Indian IT firms themselves have already scaled GenAI bookings, rising from $3 billion in FY24 to $5.9 billion in FY25. The note made the case that AI is not just a global headline but already a domestic opportunity for Indian vendors, provided they invest in upskilling and productisation.
Nomura pointed out that, “nlike Accenture, Indian IT companies do not have any exposure to US federal government contracts.” They added that the revenue growth momentum continues to be strong in Financial Services but “there has been no noticeable change in the macroeconomic environment. Gen AI opportunities continue to mature gradually.”
Indian IT sector outlook: All eyes on macro headwinds
Taken together, the three brokerage reports highlighted that managed services continue to attract multi-year contracts, but competition for those deals is fierce. Financial Services is a genuine bright spot. Generative AI has moved past the proof-of-concept phase to becoming a billion-dollar-plus revenue stream.
The challenge for Indian IT firms as per the brokerages is straightforward in numbers: Accenture has 77,000 AI/data professionals, 6,000 advanced AI projects, and plans $3 billion in acquisitions for FY26, on top of the $1.5 billion spent in FY25. Indian vendors must decide how to close that gap through M&A, accelerated training, or partnerships while keeping margins intact at utilisation levels near Accenture’s 93 per cent.
The verdicts as per Nuvama is that “the near-term read is neutral, but AI is structurally too large to ignore” JM Financial focusses on stability and Nomura hinged its focus on the fact that Indian IT benefits from not carrying federal exposure, and Financial Services plus GenAI provide clear growth drivers.