Ditch the Accenture Prism. TCS, Infy good bets as FIIs resume shopping
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Accenture’s latest earnings punched a 7% hole in its immediate market value and simultaneously sapped the enthusiasm of investors in Indian IT – the nearly $260-billion globalized industry that has the second-highest Nifty weighting after banking and financials. At first glance, several of the concerns highlighted by the Accenture management seem to equally apply to Tata Consultancy Services (TCS), Infosys, or HCLTechnologies – local bellwethers that are also the traditional favourites of overseas investors shopping for risk assets in Mumbai. More importantly, uncertainty over a durable – and sanguine - resumption of discretionary expenditure in the US and Europe’s richer neighbourhoods continues to cast an unwelcome shadow over the prospects of the listed Indian technology pureplay, with several brokerages holding out lessons in caution from Accenture’s earnings. While the parallels with Accenture should not be ignored, it is instructive...