Deal wins by top Indian IT companies rose to $21 billion in the quarter to June, led by large-sized deals in the $10-50 million bracket. The growth indicates a deviation from earlier trends where companies leaned on small deal wins.
“If you look at just from a value standpoint, there is the large deals are dominating the pipeline in terms of how we won, because last year we won 2 mega deals. This year, we are starting with 2 mega deal wins in 1 quarter. So, TCV bookings led by our large deals is indeed growing much faster than the smaller and medium deals. This is also true when you keep in the context that the discretionary spends have been big. Number 1 priority and agenda for clients is cost takeout, that also fuels what they would like to spend in newer areas,” said Aparna Iyer, Chief Financial Officer at Wipro.
“The majority of the deal wins are on vendor consolidation and cost optimisation. The problem is that we’ll still see some churn at least for the next quarter. Seasonally, Q3 will be better for them. So we’ll have to look at that,” said an equity analyst, who declined to be named.
Uncertainty despite deals
Wipro had a good quarter with two mega deals (one in the BFSI sector) and one large deal in the tech and communications vertical that has the potential to become a mega deal. However, the company still viewed the deal win pace to be slow. Stating that geopolitical uncertainty, trade war uncertainty, trade war cause deal win uncertainty the company foresees a tough couple of quarters. As and when the discretionary spending goes up, in terms of budgets, the situation will improve, it said.
The large deals closed in Q1 and Q4 of FY25 along with strong pipelines put the company in a good position for the second half of the year. Americas remained a strong region with a 1.5 per cent growth annually in constant currency terms. APMEA’s revenue stayed flat. Digital spending in India, Middle East and Southeast Asia kept the market resilient.
According to Motilal Oswal, despite the strong deal wins, revenue conversion continues to be weak. This has been the case over FY24-25, with potential leakage and deferrals leading to lower conversion.
Deal win to reflect in Q2
Tech Mahindra’s deal wins grew sequentially and annually, with large deals over $25 million making up a significantly higher proportion of total large deal pieces. The deals are broad-based across comps, hi-tech, BFSI and other verticals. Mohit Joshi, CEO at Tech Mahindra, said the deal win momentum remains strong and expect the impact on revenues to start in Q2.
When asked whether the mid-large clients will continue to grow, Rohit Anand, CFO at Tech Mahindra said that while larger clients are growing much faster than the company average, macroeconomic trends are uncertain so there is quarterly variation on different customers at different points of time. He advised looking at it as more as annual trends.
Looking at Tech Mahindra’s performance, Sanchit Gogia, Chief Analyst and CEO at Greyhound Reserach said that Tech Mahindra showed a good performance during a quarter where most other Indian IT majors reported a sequential revenue decline.
“63 per cent of global CIOs deprioritised discretionary digital investments in BFSI and telecom through late FY24, resulting in delayed project ramp-ups and weak billing conversion. While this slowdown hurt peers with heavier exposure to North America and high-discretionary verticals, Tech Mahindra’s narrower BFSI footprint and stabilising telecom business insulated it from sharper declines,” he said.
AI led deal wins
Infosys won one mega deal in the quarter with deals focused on AI, transformation and consolidation. A lot of clients benefitted from cconsolidation decision, said the company during the press conference. The company expects some of the large deals to ramp up and transition in the first few months but the revenue benefits will not be felt during this period.
Delays in deals
TCS acknowledged delays and scope reductions in Q1, with clients reprioritising deals wherever they could.Even so, it maintained that the overall pipeline remains strong with TCV worth $4.4 billion from North America, $2.5 billion from the BFSI sector and $1.6 billion from the Consumer Business Group. Consumer business was one of the most affected sectors with widespread industry challenges resulting in funding delays, project postponements and delayed milestone completion.
“There was one particular large client that decided to delay the work or extend the period over which the work can be done, and ramped down the number of people engaged. The deal was neither cancelled nor paused, but the duration was increased to manage spend. The immediate quarter revenue numbers are not in sync with what we should be expecting,” said K Krithivasan, CEO of TCS, adding that once the growth returns, customers who have fallen out of the over $100 million client range will return.
According to Yes Securities, this quarter highlighted a widening disconnect between revenue growth and TCV expansion. The revenue realisation from deal wins typically occurs with a lag of 3-4 quarters, said the equity firm. In contrast, immediate conversion remains weak, indicating that new deals are taking time to ramp up, especially large cost take-out deals.
“This lagged conversion trend has weakened in the most recent quarters, suggesting potential delays in execution or a softer revenue impact from recent deal wins,” said Yes Securities.
Difficulty ramping up
HCL Tech attributed the deal performance this quarter to delay in deal closure and one large deal taking time to ramp up. However, it remained comfortable with our 3-5 per cent guidance.
“We had a couple of large deals in the pipeline which we were expecting to close in Q1. These deals have moved into Q2, and this delay is unrelated to external factors. We are optimistic about their conversion. The TCV number should see a step-up next quarter,” said C Vijayakumar, CEO at HCL Tech, adding that the digital business is seeing a number of large deals due to an engineering-led approach. The company noted strong demand in Financial Services and Tech and Services verticals and some concerns in overticals like Auto in Manufacturing, Retail, CPG and Life Sciences. The company remains optimistic as it does not see tariff war deteriorating the environment.
Equity firm Motilal Oswal said eight out of nine renewal deals for the company had higher revenue as compared to the earlier contract value, validating the point that gains are being immediately reinvested in the business.
Published on July 23, 2025
