Accenture said it has seen an improvement in banking and financial services, a good sign for Indian IT services companies that were concerned about growth from their largest business segment, but analysts still expect volatility in their results.

Fears of a looming recession had lead banking and financial services companies, who contribute about a third of Indian ITs revenue, to hold back on some spending. On Thursday, Accenture reported that its banking and capital markets segment had improved globally.

“Even as the demand environment is reasonable for offshore pureplays, we expect rough edges to performance of companies with volatile financial services and uncertain manufacturing especially for those that have high exposure to the auto segment,” Kawaljeet Saluja, analyst with Kotak Institutional Equities said in a note.

He added that the broader demand was still reasonable but that a slowing market was also a reality.

“ We expect strong growth on year-over-year comparison for offshore pureplays in the first half of the year with some softening towards the latter half of the year,” Saluja added.

Accenture also raised its full-year revenue growth guidance to 8-9%, from 6.5-8.5% with acquisitions expected to add more revenue than before. Accenture has spent $1.1 billion in acquisitions in its current fiscal, analysts pointed out.

“Accentures performance and comments reinforce our stance that the demand trends, order book and deal velocity hint at sanguine FY20E revenue growth for the sector. Pockets of weak BFS may drive marginal, but not meaningful deceleration,” brokerage Motilal Oswal said.

However, Prabhudas Lilladher analysts said there wa


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