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Promising Tech Deal Activity Despite Volatility
Promising Tech Deal Activity Despite Volatility

June 5, 2025

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Deal analysis of Indian and Global tech companies during Jan-25 to Mar-25.

Globally, Q4FY25 emerges stronger than previous quarter driven by Europe & UK, and BFSI

 - Q4FY25 witnessed a rebound in deal activity with an increase in deals volume by 1.3x.

 - While average deal duration shortened to 5 years, the average deal value nearly doubled, signalling a trend towards large value - shorter-term deals.

 - This shift aligns with the industry’s broader transition from cost optimisation projects to business transformation initiatives, particularly those leveraging GenAI and automation technologies.

 

Source: BNP Paribas, Analyst reports

 

 

  • Europe & UK emerged as the growth engine, with 1.7x increase in tech deals volume followed by North America that increased by 1.1x.
  • Within Europe & UK, 21% of deals were focused on the BFSI vertical.
    • Accenture - BCC Iccrea Group (Cooperative banking group in Italy): Supporting IT transformation within the framework of the broader IT reinvention plan.
    • Cognizant - KBC Group (Bank and insurance group in Belgium): Supporting IT and business transformation efforts in application development, data services, and infrastructure.

  • BFSI continues to see strong momentum in Q4FY25 driven by increased investments in AI and cloud to modernize core platforms.
    • Nearly 40% of the deals were centred in Europe & UK led the BFSI deals with ~40% share, compared to 13% in Q3FY25.
    • Share of North America declined from 33% in Q3FY25 to 20% in Q4FY25.
  • Focus area in BFSI:
    • Core Banking Modernization: Financial institutions are overhauling legacy systems with platforms like TCS BaNCS and Temenos to improve efficiency and resilience.
    • Cloud Migration: Clients are migrating infrastructure to cloud to optimise costs and improve agility.
    • AI-led Innovation: Use of AI is growing for products & platforms, and personalization.
      • BFSI vertical witnessed a clear shift toward centralized platforms for data management, treasury, and customer experience. 
  • Meanwhile, Hi-tech and Retail & CPG verticals showed signs of improvement with digital transformation initiatives and strategic use of AI and automation to modernize core IT infrastructure and operations.

  • AI and Cloud led capabilities accounted for 29% share of the total tech deals compared to 26% in Q3FY25.
  • The surge in AI-led engagements continues, being the most dominant theme in both Q4FY25 and April 2025, increased 1.4x q-o-q, driven by:
    • Nearly 70% of the AI led deals were signed in Europe.
    • AI led deals were majorly focused on BFSI and Retail & CPG verticals.
    • Illustrative examples
      • Capgemini - Peugeot Sport (Motorsport division of Peugeot - Automobile manufacturer in France): Developing the 9X8 Hypercar while enhancing its performance through data with AI.
      • Infosys – Citizens (Largest financial institution in the US): Expanding partnership to drive AI-powered transformation.
  • Cloud led deals increased 1.5x, with majority of the deals focused on the BFSI vertical.
  • However, cybersecurity and data engineering saw a slight decline, suggesting clients may be bundling these capabilities within the broader modernization/transformation or AI programs.

  • Indian technology firms* saw a 17% q-o-q increase in deal signings in Q4FY25, with the total number of deals rising sequentially.
  • Geographically, growth was driven by increased deal activity in Europe & UK, up by 1.3x, strengthening the deal momentum.
    • North America witnessed slight softness in deal signings in the recent months due to uncertainty around tariffs.
  • BFSI continued to dominate, up by 1.3x in Q4, reflecting ongoing investments in tech-led transformation and automation.
  • Telecom vertical witnessed a smaller number of deals due to cautious spending related to 5G monetisation challenges.
  • Retail and Manufacturing increased slightly, while they remain under pressure due to direct impact from tariffs.
  • Technology deals declined marginally, signalling some consolidation and stretched decision making.
  • Illustrative example
  • Wipro - Phoenix Group (Insurance giant in UK): Delivering life and pension business administration for the ReAssure business and accelerate operational transformation.
  • LTIMindtree - Eurobank Group (Leading banking group in Greece): Enhancing customer experience by improving banking operations and building innovative IT services.

 

Early Signals and Way Forward: FY26 Outlook

  • April 2025 saw 15 deals, matching the monthly run-rate of Q4FY25, driven by:
    • BFSI remains the largest contributing ~40% of the total deals.
    • AI & GenAI continues to lead - 6 deal signed.
    • Europe & UK led with 5 deals signed while North America followed with 4 deals.
  • The pace and effectiveness of AI integration—companies that can rapidly adopt and scale AI will likely drive more deals, while laggards may fall behind or consolidate.
  • Ongoing innovation in cloud, cybersecurity, and data engineering, as these remain critical areas for transformation and competitive advantage.
  • Basis the tech deals activity in April, we expect the momentum to sustain in Q1FY26, giving a strong start to FY26.

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Prajwal Pandey
Research Analyst

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