Recently, Accenture Inc. (ACN) won a 2-year information technology (IT) services contract from Israel Electric Corporation (IEC). Financial details were not disclosed.
Israel’s monopoly power supplier, IEC currently has six projects in its IT blueprint. The successful completion of the plan will enable IEC to improve customer service, introduce technological changes and ensure a safe and reliable electricity distribution network.
As per the terms of the contract, Accenture will provide technical support to every phase of the six projects operating under IEC, which includes roadmaps, application systems, a smart electrical grid, business intelligence, enterprise architecture and business continuity.
Accenture has shared business ties with IEC since 2009. Its IT services have already aided IEC to formulate an IT master plan. We believe that both companies will try to further this association. Also, Accenture’s ability to increase penetration within existing customers is indicative of the quality of its services.
Accenture has seen successes across various industrial sectors. Recently, Accenture received a 5-year Procurement Transformation contract from the City of London Corporation to develop required shared service centers to reduce procurement costs. Moreover, Consip, a public company owned by the Italian Ministry of Economy and Finance awarded Accenture a four-year, $6 million contract to set up an eProcurement system to increase efficiencies and ensure value for money across suppliers.
We are positive about Accenture’s improving business trends as evident from the healthy growth in revenue and bookings in its fiscal third quarter. However, the recent economic turmoil in Europe and competitive pressure from International Business Machines Inc. (IBM) could considerably rationalize Accenture’s growth prospects.
Accenture has a Zacks #2 Rank, implying a short-term Buy recommendation.
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