Though the just-concluded quarter missed mega deal announcements, Indian IT firms leveraged their partnerships with top clients to put up a strong show. From generating revenue from additional demands of existing clients, and restarting clients’ backlog projects to harvesting top clients, IT firms lapped up these incremental works with finesse.

Top IT firms saw their top clients’ contribution to their total revenue jumping in the second quarter. HCLTech’s top 20 clients that contributed 27.3% of its revenue in Q2 of last fiscal, are now contributing 350 bps (100 basis points is 1%) more currently (at 30.8%). Infosys’ top 10 clients are contributing 100 bps more today than what they were contributing to the corresponding period of last year. Similarly, Wipro’s top 10 clients are contributing 230 bps more today (at 22.9%) than what they were contributing (20.6%) in the corresponding period of last year.

C Vijayakumar, chief executive at HCLTech, said at a Q2 earnings call that the firm has a lot of existing clients and “it is really additional demand which is coming based on the rate cuts.”

CEO of the largest Indian IT firm, TCS, K Krithivasan said the optimism comes from the backlog of work, “which some of our customers have not been able to carry forward because of the current environment they are in.”

Echoing similar sentiments, Peter Bendor-Samuel, chief executive of consulting and research firm Everest Group, said small deal acceleration is driven by several factors. “The first is the need to unlock value from existing digital investments. These initial investments were often made before and during covid and now the businesses are looking to extract more value from these investments requiring further investments but on a smaller scale.

“A second factor is continued caution around the macro-economic situation and hence firms are making smaller bets equalling smaller deals”, Peter said.

Salil Parekh, chief executive of Infosys, also noted during the Q2 earnings call that smaller-sized deals which doubled in Q2 “was a little bit additive”.

In a recent interaction with ET, Nitin Rakesh, CEO and MD of Mphasis, noted that clients whose programs are currently ongoing are willing to fund for the next phase of the programs and willing to finish that next phase within 6–12 months.

Mega deals getting lumpier

Top IT executives like Krithivasan and Parekh opined that large and mega deals total contract value (TCV) are getting lumpier. Analysts said this means there can be a lull for one or two quarters, and the following quarter can see a blitzkrieg of deals’ announcements by the IT firms.

Pareekh Jain, chief executive of EIIRTrend, an engineering insight platform, said, closing mega and large deals are taking time because of the long sales cycle in this uncertain macro situation.

“Uncertainty is also more for the fact that clients’ commitment for long duration or large value deals are becoming riskier with the advent of AI maturity and insourcing trend.”

Though the just-concluded quarter missed mega deal announcements, Indian IT firms leveraged their partnerships with top clients to put up a strong show. From generating revenue from additional demands of existing clients, and restarting clients’ backlog projects to harvesting top clients, IT firms lapped up these incremental works with finesse.

Top IT firms saw their top clients’ contribution to their total revenue jumping in the second quarter. HCLTech’s top 20 clients that contributed 27.3% of its revenue in Q2 of last fiscal, are now contributing 350 bps (100 basis points is 1%) more currently (at 30.8%). Infosys’ top 10 clients are contributing 100 bps more today than what they were contributing to the corresponding period of last year. Similarly, Wipro’s top 10 clients are contributing 230 bps more today (at 22.9%) than what they were contributing (20.6%) in the corresponding period of last year.

C Vijayakumar, chief executive at HCLTech, said at a Q2 earnings call that the firm has a lot of existing clients and “it is really additional demand which is coming based on the rate cuts.”

CEO of the largest Indian IT firm, TCS, K Krithivasan said the optimism comes from the backlog of work, “which some of our customers have not been able to carry forward because of the current environment they are in.”

Echoing similar sentiments, Peter Bendor-Samuel, chief executive of consulting and research firm Everest Group, said small deal acceleration is driven by several factors. “The first is the need to unlock value from existing digital investments. These initial investments were often made before and during covid and now the businesses are looking to extract more value from these investments requiring further investments but on a smaller scale.

“A second factor is continued caution around the macro-economic situation and hence firms are making smaller bets equalling smaller deals”, Peter said.

Salil Parekh, chief executive of Infosys, also noted during the Q2 earnings call that smaller-sized deals which doubled in Q2 “was a little bit additive”.

In a recent interaction with ET, Nitin Rakesh, CEO and MD of Mphasis, noted that clients whose programs are currently ongoing are willing to fund for the next phase of the programs and willing to finish that next phase within 6–12 months.

Mega deals getting lumpier

Top IT executives like Krithivasan and Parekh opined that large and mega deals total contract value (TCV) are getting lumpier. Analysts said this means there can be a lull for one or two quarters, and the following quarter can see a blitzkrieg of deals’ announcements by the IT firms.

Pareekh Jain, chief executive of EIIRTrend, an engineering insight platform, said, closing mega and large deals are taking time because of the long sales cycle in this uncertain macro situation.

“Uncertainty is also more for the fact that clients’ commitment for long duration or large value deals are becoming riskier with the advent of AI maturity and insourcing trend.”