IT still a long way from re-rating

ON THE LOOKOUT DISCRETIONARY IT spends still remain subdued, cautions Accenture management THE Nifty IT index trades at premium valuation despite delayed revenue revival

- Harsha Jethmalani

Indian IT services sector is the most preferred investment theme among fund managers, according to the latest Asia Fund Manager Survey by BofA Securities. In June, 21% of fund managers chose the sector as their top pick, up from 13% in May. The survey findings were followed by results from global IT major Accenture, which is seen as a bellwether for Indian tier-1 IT firms.

Accenture, which follows a September-August financial year, reported 7% year-on-year constant currency revenue growth in the quarter ended May (Q3FY25), beating consensus estimates and meeting the upper end of its guidance range.

A Motilal Oswal Financial Services report dated 20 June said the impact of a tariff-related pause was milder than earlier feared for Accenture.

The Nifty IT index, too, has rebounded to 39,046 after slumping to a 52-week low of 32,517 on 7 April, amid sharp selling triggered by the US tariff announcement on 2 April.