Deal wins by software and IT services companies, Indian and global, have seen an uptick in May in terms of the numbers pointing to signs of a recovery, after steep declines seen in January and in April. Deal wins have been volatile since November last year.
There were 17 deal wins by major IT companies during the month, up nearly 55 per cent from April, according to data collated by BNP Paribas Exane. Majority of the deals were from the banking, financial services and insurance sector, the data showed.
With discretionary spending still slow in the US and Europe, deferrals in signing deals and delays in pipeline conversion, Indian software companies have been cautious in their commentaries in terms of deal visibility. Some of the companies such as HCL Technologies and Coforge gave out weaker-than-expected revenue guidance while L&T Technology Services and Persistent Systems also gave out muted margin forecasts.
“Clients are pausing or deferring discretionary programs, focusing on gaining quick RoI,” according to Emkay Global’s analyst. It added that the latest Federal Reserve minutes indicating high inflation for longer and therefore delay in rate cuts would impact client decision making.
Deal Wins
The three-month rolling sum of deal signings saw a continued improvement, BNP Paribas said. Infosys Ltd saw the highest number of deal wins in the month, followed by Accenture and Capgemini.
One of the biggest deals announced during the month was that of Infosys’ multi-year collaboration with Australia’s Telstra to boost its software engineering and IT transformation. In June it announced a collaboration with Nihon Chouzai to expand healthcare access in Japan.
HCL Tech and Amazon Web Services entered into a collaboration to help enterprises explore and develop GenAI-led use cases, tools and solutions. TCS was selected by Kuwait’s Burgan Bank to deployits core banking solution.
Wipro signed a deal with Close Brothers for digital transformation solutions.
Europe tops the table
A snapshot of the deals won shows that Europe accounted for over 41 per cent of the deal, followed by rest of the world and then North America.
Based on commentaries from major IT companies and macro-economic outlook in the major economies, absolute recovery timelines have been pushed towards the second half of the year or FY26.