Accenture Q4 Review – Sharp Deceleration In FY23 Organic Growth; Downside Risks Exist: Nirmal Bang


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Accenture plc ended FY22 with a strong Q4 FY22 (August year ending) performance, strong order bookings and all financial aspects exceeding original guidance.

Order inflow in the quarter was the second highest, with Accenture indicating a strong pipeline going into FY23. For FY23, Accenture expects revenue growth of 8-11% with 2.5% inorganic contribution.

The organic growth of ~7% is a significant deceleration from the 21% delivered in FY22. Growth in FY22 by Accenture was significantly better than all Indian tier-I players despite its size. The organic growth indicated for FY23 is faster than that seen in many of the pre-pandemic years on a larger base.

The guidance apparently takes into consideration the decelerating macro over the past three months, but we are not sure whether a recession (shallow or deep) has been built into it.

We suspect that the guidance has downside risks and visibility into H2 FY23 is likely poorer than in normal years.

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