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Powering Global Business Efficiency with Multi-Billion-Dollar Contracts
Powering Global Business Efficiency with Multi-Billion-Dollar Contracts

October 11, 2023

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In the ever-evolving landscape of global technology, Indian technology firms are making headlines by securing multi-billion-dollar contracts aimed at optimizing cost-efficiency for businesses worldwide. These contracts involve tech giants taking the reins of specific assets and personnel from their clients, all with the common goal of streamlining operations. The Indian tech industry stands at the forefront of this trend, leveraging its substantial talent pool of skilled and experienced professionals, competitive pricing, and profound understanding of the international business arena to deliver tailored solutions aligned with clients' unique needs.

In the June quarter alone, the top four Indian IT firms - TCS, Infosys, Wipro, and HCLTech - collectively secured deals worth nearly $20 Bn. Let's delve into some of the standout developments:

TCV (In USD Bn)

   

Company

Q4FY23

Q1FY24

TCS

10

10.2

Wipro

4.1

3.7

HCL - Large deals

2.1

1.6

Infosys - Large Deals

2.1

2.3

Source: Quarterly results

Note: List of TCV not exhaustive.

 

Infosys: Empowering Liberty Global's Transformation

Infosys has recently expanded its partnership with Liberty Global, a global telecom major, in a deal valued at $1.6 Bn over an initial five-year term. If extended to eight years, this contract would be valued at $2.4 Bn. The collaboration aims to introduce AI-driven digital entertainment to a global customer base, and enable Liberty Global to achieve annual run-rate savings of more than 100 Mn euros. Additionally, over 400 Liberty Global employees will join the Infosys.

TCS: Nesting a Promising Partnership

TCS secured a contract from Nest, the UK's largest workplace pension scheme. Valued at 840 Mn pounds with an initial tenure of 10 years, this deal provides an option to extend the tenure by eight years. The agreement aims to modernize and digitize Nest's scheme administration services.

HCLTech: Powering Verizon Business

HCLTech triumphed with a monumental $2.1 Bn deal from Verizon Business, encompassing managed network services for enterprise customers. Verizon's formidable network strength, innovative solutions, and scalability will merge with HCLTech's expertise in managed services to provide enterprise customers with extensive wireline service delivery on a large scale. Such large-scale contracts prove advantageous as they establish long-term relationship with customers.

 

Wipro: Transforming Businesses with ServiceNow

In a significant move towards innovation and market evolution, Wipro has embarked on a five-year business collaboration with ServiceNow. This strategic partnership is geared towards not only introducing novel solutions but also empowering clients to navigate the ever-changing landscape of business transformations, address challenges effectively, and unlock greater value. This collaboration represents an expansion of the pre-existing partnership between Wipro and ServiceNow, underlining their commitment to mutual growth and innovation. With this partnership, Wipro and ServiceNow will collaborate to offer clients a comprehensive range of services including process consulting, implementation, configuration, and managed services. Wipro has set an ambitious goal to establish a $1 Bn business with ServiceNow by 2026, a testament to their shared vision.

 

Paradox

Amidst the grandeur of billion-dollar agreements, a striking paradox surfaces—these extensive deals span at least five years, which moderates their immediate quarterly revenue effects. It's worth noting that decision-making cycles still face delays due to global macroeconomic uncertainties, and the exact timing of revenue realization from these deals remains uncertain. In this perspective, the importance of smaller deals, including those up to $100 Bn, emerges as a crucial contributor to quarterly revenue growth.

 

Source:

https://nasscom.in/knowledge-center/publications/quarterly-industry-review-september-2023

https://www.livemint.com/companies/news/infosys-signs-1-64-billion-deal-with-liberty-global-to-scale-digital-platforms-11692085227849.html

https://timesofindia.indiatimes.com/business/india-business/it-cos-strike-it-rich-with-mega-deals/articleshow/102922027.cms?from=mdr


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Prajwal Pandey
Research Analyst

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