Information Technology – Sector Update – Weak result cloud FY27 start for Indian IT peers

Accenture’s (ACN: NYSE) Q3FY26 revenue growth came in below consensus estimates, while bookings were weaker than anticipated due to delayed closure of large deals amid disruptions caused by the Middle East conflict. Management highlighted a ~US$100mn revenue impact in Q3FY26 from the Middle East conflict, with continued disruption expected in Q4FY26, leading to a 100bps reduction in the upper end of its FY26 revenue growth guidance. The impact was also visible in bookings, particularly within Managed Services, where several large deals were deferred into FY27, highlighting elongated decision-making cycles. The company also announced a dedicated strategy to target mid-market enterprises (US$300mn–US$3bn revenue), which it estimates represents a US$ 240 bn addressable market. For Indian IT services companies, the read-through is incrementally negative as the results suggest a softer start to FY27, with limited direct revenue exposure to the Middle East but potential indirect impact through delayed deal closures, slower project ramp-ups and prolonged client decision cycles. Further, Accenture's increased focus on the mid-market segment could intensify competitive pressures for mid-cap Indian IT companies, while weaker Managed Services bookings and the guidance cut suggest that discretionary spending weakness & delayed decision making, pointing to a weaker H1 for Indian IT peers.