The highest-ever large deal wins were reported by top Indian IT services companies, in the fourth quarter ended March, as demand for digital services among enterprise clients continued to grow. The large deals aided these companies in achieving good sales growth in a traditionally slow quarter. Companies switching to a digital business model to remain competitive by embracing newer technologies result in digital transformation deals. According to a Nasscom-McKinsey survey, such deals have increased by 30 percent since the start of the pandemic.
Tata Consultancy Services Ltd (TCS) announced a $9.2 billion deal closing in the fourth quarter. The order book for FY21 was $31.6 billion, up 17 percent from the previous year. After the results, management stated that strong contract wins and a healthy deal pipeline would ensure double-digit revenue growth in FY22.
HCL Technologies Ltd’s cumulative contract value (TCV) of net new deals reached an all-time high of $3.1 billion in Q4. Financial services, life sciences and healthcare, consumer products, and manufacturing are among the industries, where it has secured 19 new big deals. It signed 58 big deals in FY21, with new contract TCV of $7.3 billion, up 18 percent from the previous year. HCL Technologies’ president and CEO, C. Vijayakumar, said, “The booking and pipeline reflect a well-balanced combination of service lines, geographies, and industries.”
The big deal TCV for Infosys Ltd. in the fourth quarter was $2.1 billion, while the TCV for FY21 reached an all-time high of $14.1 billion, with 66 percent of it coming from new business. A $3 billion deal with Daimler AG, a German automotive giant, and a $1.5 billion deal with Vanguard, a US investment management company, were among the large deals won in FY21.
“Our relentless emphasis on client relevance, the expansion of our digital portfolio with differentiated capabilities like Infosys Cobalt, and the empowerment of our employees have helped us establish ourselves as a preferred partner for our global clients. The success of this strategy is demonstrated by our record wide deal wins,” said Salil Parekh, CEO and managing director of Infosys.
Wipro Ltd. has secured 12 major contracts worth $1.4 billion in the March quarter and $7.1 billion in the second half of fiscal year 21. Wipro is forming a broad sales team across the company, to capitalise on new and existing account opportunities and take them to the next stage.
Among, Wipro’s notable contracts is a nine-year contract with German retailer Metro AG. Telefónica Germany awarded it a five-year IT transformation contract in February, to assist the telecom business in modernising and launching a variety of new offerings, including 5G products and services. According to analysts, large deals are essential for IT services companies to accelerate sales growth and achieve double-digit growth.
“In the days ahead, the scale and complexity of large deals will only grow” EY India’s technology sector chief, Nitin Bhatt, said as much. Large transactions have a distinct DNA. They necessitate a different risk appetite, investment capability, commercial structure, and the need to manage an ecosystem of partners, in order to provide long-term value to customers.
