Why Accenture’s latest results signal good news for the Indian IT sector

On Thursday, Accenture ended the day up 15.7% on the New York Stock Exchange after posting market-beating numbers for Q4 and full year FY26. The company follows a September-August fiscal calendar. For Q4 (June-August), the company posted guidance-beating 7% year-on-year revenue growth of $18.7 billion. During the quarter, the company saw $22.2 billion of bookings, with over 37 clients in the $100 million-plus bucket. For the full year, Accenture saw its revenue rise 5% to $74 billion, adding nearly $4.5 billion incrementally.

At the company’s earnings call, Julie Sweet, chair and chief executive officer, noted that clients were at various stages of AI adoption and enterprises believe that AI can help them do more across the board.

“Much of our growth today comes from continuing to build their digital core, data foundations and the enterprise AI stack needed to use AI at scale,” she said.

With many firms beginning their AI journey, “nearly 100 additional clients initiated their first advanced AI work with us this quarter, bringing the fiscal 2026 total to more than 400”.

For FY27, Accenture has guided for 3-6% revenue growth in constant currency, with inorganic contribution at 2-2.5% and operating margin in the range of 15.9-16.1%, a 50-70 basis point expansion over FY26. While the company sees the macroeconomic environment as still dynamic, the guidance range assumes stable to slightly improving discretionary spend growth for the top end and any deterioration in demand for the lower end. For 1QFY27E, Accenture expects revenue growth to be in the range of 2-6%.

The AI tailwind

Accenture’s broad-based growth across markets and industries came along with its partnerships with big tech and frontier companies outpacing the company's growth rate.

“Our top 10 ecosystem partners represented more than 60% of our revenue in fiscal 2026, and revenue from that work grew 6%, outpacing Accenture overall. For our eight emerging AI and data partners, bookings more than tripled and revenue more than doubled compared with fiscal 2025,” said Sweet.

The company noted that AI adoption was broadening across enterprise functions, including customer experience, conversational AI, demand forecasting in supply chain and agentic analysis in finance.

Even with the increase in spending on AI, Accenture said it saw lower token costs for new models and expects this to increase the use of AI by enterprises in more places and at scale — the demand that IT services and consulting firms will see in the coming days.

“The more change there is, the more they turn to us. So, we see that dynamic as the token cost goes down, and that's going to help generate longer-term demand,” Sweet added.

With the company’s bullish commentary on AI, Accenture expects to spend much more on acquisitions compared to FY26. With its recent acquisition of Dragos and the run of Zero and NetRise cyber shifting from Q4FY26 to Q1FY27 due to regulatory approvals, the company spent $4.9 billion on acquisitions in FY26 and now looks to spend nearly $5 billion in FY27.

Accenture sees this as a part of its growth strategy, Sweet told analysts: “When we see significant opportunities in the market through acquisitions to either grow in really high-growth areas like data and AI and to expand into new areas like we've done with data centers, we've done with data and OT security, we go after them because that's how you position for long-term growth.”

Silver lining for the Indian IT firms

With increasing AI adoption bringing more work, IT companies are also trading off by passing more productivity gains to clients for more work.

“We are definitely giving more productivity due to AI. And overall, though, the impact has been steady. So — and we're offsetting as we have in the past with new kinds of work, more scope, etc. So absolutely giving more AI efficiencies and more than offsetting that as a whole,” Accenture’s CEO said.

Even Indian large-cap firms are not only willing to proactively give clients a discount using AI but are also seeing new kinds of work due to AI for which clients are now willing to pay.

That said, the AI component of revenue for IT firms has seen fast-paced growth. For instance, TCS saw its annualised AI revenue hit $2.6 billion in Q1FY27, up 13.6% QoQ; for HCLTech, the sequential growth rate of its advanced AI revenue was 10.6%.

Following Accenture’s results, analysts at Nomura Research expect FY27 macro environment to remain similar to last fiscal year, with the Middle East headwind persisting and pricing pressure in specific business segments with competition intensifying.

With TCS set to announce its Q2FY27 numbers on October 8, followed by HCLTech on October 12, domestic brokerage firm Motilal Oswal Financial Services expects demand commentary to remain soft into 2QFY27, despite it being a seasonally strong quarter, with macro pressures, interest rate hikes, AI-related disruptions and geopolitical overhang continuing to weigh on discretionary spending and decision-making cycles.

Its recent note on the sector said, “Despite the meaningful correction in valuations, we believe a sustained re-rating will require evidence that demand is improving, revenue growth is accelerating, and companies can demonstrate that AI-led opportunities are beginning to offset productivity-related headwinds.”