Adding to the cheer around a more positive IT demand outlook in 2014, top US software consultancy firms Oracle and Accenture announced positive results that exceeded analysts expectations.
For Q2, Oracle said overall revenue rose 2% to $9.3 billion, above the analyst expectations of $9.2 billion. Net profit fell 1% to $2.6 billion. Accenture said income from the consulting business fell 1% to $3.94 billion in the first quarter ended November 30. However, its Q1 revenues rose to $7.36 billion, above analysts’ expectations of revenue of $7.25 billion. Outsourcing revenue increased 5% to $3.42 billion.
Coming after three quarters of revenue losses on account of weak global IT spending, Oracle’s results boosted hope of cautious recovery for the software firm – and Indian industry, which is significantly impacted by earnings of Oracle and Accenture.
In a report, Nitin Padmanabhan of Espirito Santo Securities, said, “Oracle Financial Software Services, a 75% subsidiary of Oracle Corp, is India’s most successful software product company.
However, with all its key markets reaching saturation point, the proportion of licence fees has fallen from 47% in FY03 to 14% in fiscal 2013, but a weak rupee has provided a floor and held up margins. We forecast revenue and earnings compounded growth rate of 7% and 12% over fiscals 2013-15.”
Oracle’s positive results comes just days after IT experts, as well as top Indian IT firm TCS has predicted better demand outlook in fiscal 2015, with no changes in client decision making, and broad-based growth across geographies and verticals.
On Thursday, global research firm IDC said India is ranked third in terms of software developers after US and China, and the IT services market in India is expected to grow at a rate of 8.3% year-on-year in calendar year 2013, reaching a value of $7.97 billion.
According to IDC, the Indian IT services market saw year-on-year growth of around 7.6% in first half of the calendar year 2013 over the year-ago period.