Accenture FY23 guidance key to track this week amid Europe manufacturing slowdown concerns

Accenture's guidance this week for the next year is in focus after Nifty IT slipped by around four percent in trade on Friday.  This will be the first big global IT company to give an indication of what growth next year is going to look like.

Accenture's financial result, expected to release on September 22, is of significance because it comes amid rising concerns about a slowdown in Europe manufacturing as there are worries about delays in the decision-making cycle, some slowdown in order wins, etc.

FY22 was very strong for Accenture. In fact, in the last quarter, the company raised the local currency guidance for FY22.

However, the question is will FY23 guidance be lower than FY22 and if yes, how much? Also, Accenture has a very interesting split. It gets about 53 percent of its revenues from consulting and the balance from outsourcing.

Consulting is usually seen as a lead indicator for discretionary technology spending. So if there is budget tightening, the first thing to probably halt is consulting spending. This will also give a sense of tech spending from Accenture consulting bookings and the outsourcing business.

Outsourcing is where the Indian IT players like TCS, Infosys, Wipro, and Tech Mahindra play, so Accenture's numbers and guidance for next year are going to be very crucial. In the previous quarter, there were already some signs of a slowdown in the order win so this is going to be a big one on Thursday.