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Research evidence excerpt

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to question a structural shift in market. Capgemini has started

to accelerate growth (helped by relatively soft comps), but until the broader sector inflects, Chart 1 - Capgem has recently outperformed

on org. Growth

it is hard to push back on structural concerns.

2) AI impacts: AI is changing the IT landscape, commoditising some aspects of traditional

IT spend (eg traditional application integration) and creating new pockets of demand (eg

data consolidation and security). Some companies have started to talk to this dynamic,

eg HCL, and we think talking to this mix shift is the best way to build confidence in the

sustainability of forward-looking growth. .

Source: Jefferies, Company data

3) The interaction with LLM companies: Capgemini recently announced an investment into

Chart 2 - ERP Exposure is around 15% of the the OpenAI Deployment Company. We think this will become a key debating point. On the Market

one hand, it shows the value of IT Services in driving AI adoption at scale in the enterprise.

However, with the OpenAI Deployment Company acquiring its own capacity, eg Tomoro,

the lines between friend and foe are starting to blur.

Valuation: In a sector where global players tend to follow the same growth trajectory, valuation

discussions normally end up a relative game, especially versus Accenture. While Capgemini is

.

cheaper now than in the past, the whole sub-sector has been derated. As a result, Capgemini Source: Jefferies, Gartner, Company data

now trades on the narrowest discount to Accenture for 10 years. Until there is evidence of re-

accelerating growth at a sector level and rising peer valuations, we think it is hard to see a

material re-rating at Capgemini.

FY (Dec) 2025A 2026E 2027E 2028E Charles Brennan * | Equity Analyst