Infosys, TCS, HCL Tech in Focus as Accenture Q1 Boosts AI Optimism — What It Signals for Indian IT

On December 19th, the Indian IT stocks including Infosys, TCS, HCL Tech, Wipro, and Tech Mahindra are getting the attention after Accenture released its quarterly results that were above the market expectations which assured the optimism around the AI-led demand in the global technology services sector.

The revenue of Accenture for the first quarter of FY26 came out to be $18.7 billion which was a 6% increase as compared to the same quarter last year and was at the top of its guidance. The performance was driven largely by accelerating demand for artificial intelligence, pushing the stock up nearly 2% in pre-market trade. The company also maintained its full-year revenue growth guidance of 2%–5%, excluding a 1% impact from US government business.

The regional sales growth was widespread. The revenue from the Americas reached $9.08 billion with a 4% increase, EMEA had an 8% growth to $6.94 billion, and Asia-Pacific's $2.73 billion represented a 7% increase, all proving that the enterprise demand was still strong in the face of global uncertainty. The increase in gross margins was very slight as they moved up from 32.9% a year ago to 33.1% this year.

Accenture had almost $21 billion in new bookings, where AI was a significant factor. GenAI's share of new bookings was 11% and 6% of total revenue, respectively. The advanced AI bookings saw a steep rise of 76% from last year to $2.2 billion, and the AI revenue also jumped more than double to $1.1 billion, thus hitting the $1 billion milestone for the first time.

Julie Sweet, the Chair and CEO, stated that the company's transformation strategy's long-term validity was substantiated by the quarter's performance, and she mentioned strong deal wins, market share gains, and deeper ecosystem partnerships to scale AI-led reinvention helping clients as the main factors.

What it means for Indian IT companies

Brokerage JM Financial said Accenture’s commentary points to steady client priorities, with large transformation programs continuing even as discretionary spending remains flat compared to last year. The brokerage noted that digital core modernisation, industry-specific solutions and long-term managed services continue to provide a strong pipeline of opportunities for Indian IT firms.

Acceleration in managed services revenue and improving pricing trends were flagged as particularly positive signals for Indian peers. But, JM Financial indicated that the Indian IT shares had already gotten a lift of about 9% in the last two months, so some of the good news is already included in the price. The ability to execute and the deal momentum will be crucial in the future.

Accenture has also pointed out a fluctuating demand from the public-sector and government customers in the US, as the agencies are cutting costs and reallocating budgets. The management has stated that the discretionary spending is not yet recovered and the overall demand conditions are still very much the same as last year.

For Indian IT service providers, the results of Accenture are a mixed but positive signal. The strong AI-driven deal wins and bookings enhance the medium-term outlook, but the unchanged guidance and subdued discretionary spending imply that the near-term growth challenges still exist. The investors will be monitoring the quarterly results closely to find out if the Indian IT companies can continue to benefit from the AI-driven momentum like Accenture.