The top four IT companies saw a sharp revival in new client addition momentum in the second quarter of FY22, especially across the higher deal-size buckets compared to the same quarter last fiscal.
The four IT services companies together added 18 new clients in the $50 million-plus category in the second quarter against eight clients in the first quarter, growing 125 per cent quarter-on-quarter. These companies added eight new clients in the $100 million-plus deals category, again growing from five new clients added in the sequentially preceding quarter.
Particularly, a turnaround is seen in the big-ticket size deals above $50 million and $100 million. In the $50-million bucket, the top four IT companies have added 26 clients in the first half of this year, with 50 per cent of them being in the greater than $100-million bucket.
Growing client numbers
Even in the small-sized $1 million-plus category, TCS, Infosys, Wipro and HCL Tech have almost doubled the number of clients to 188 in the first six months of the current financial year compared to 95 clients for the full year FY21.
Tushar Shah, Director – CARE Advisory and Research, told BusinessLine, “As there is a gradual recovery from the Covid-19 global pandemic, the digital transformation spends by global corporations have witnessed a significant uptick supporting the revival in deal momentum for the top 4 IT companies. This growth has mostly been broadbased across verticals and the BFSI vertical continues to have the largest share and also the fastest growth.”
Rise in contract value
In terms of total contract value (TCV), TCS reported that excluding a mega-deal from Q2 last year, its TCV grew 25 per cent YoY to $7.6 billion in the second quarter.
Rajesh Gopinathan, CEO & MD, TCS, said, “By vertical, BFSI had a TCV of $2.1 billion while retail once again had a very strong order book of $1.2 billion. TCV of deals signed in North America stood at $3.9 billion.”
Wipro too saw a good mix of medium and large-size deals anchoring TCV growth. It witnessed 28 per cent jump in order book in terms of annual contract value in H1FY22, and TCV grew by 19 per cent YoY as per the Europe order book.
“We have strengthened our large deal team and brought in specialised expertise, so I am really confident, our participation and win rate of deals will accelerate,” Thierry Delaporte Chief Executive Officer & Managing Director, Wipro, said.
Salil Parekh, CEO and MD, Infosys, said, “We won 22 large deals up over $50 million, totalling $2.2 billion TCV; five each in financial services and energy utility, resources & services; three each in retail and manufacturing; two each in communication and hi-tech; and one each in life sciences and other segments. Region-wise, 15 were from Americas, six were from Europe and one from Rest of the World. The share of the new deals in Q2 was 37 per cent.”
Interestingly, HCL Technologies surpassed Infosys’ TCV this quarter having won 14 large deals worth $2.3 billion. This is also higher than its own TCV of $1.7 billion in the first quarter of the current fiscal.