While the fiscal first quarter earnings of India IT services sector witnessed broad-recovery across key verticals and geographies, hinting towards a better fiscal growth than the preceding year, BNP Paribas said that the industry continued to see strong deal signings in the month of August. “The 3M rolling sum of deal signings, which is a strong lead indicator of deal TCVs, remained strong in August after seeing a recovery in the recent months,” BNP Paribas said in a report. During the month of August, Accenture and Hewlett Packard Enterprise (HPE) reported the highest deal wins (3 each) and HCL Tech’s deal with Xerox and Tech Mahindra’s with Marshall Group were the highlights of the month.
According to an earlier report by Prabhudas Lilladher, the tier-I IT stocks showed a notable turnaround in Q1 after five quarters of underperformance compared to tier-II IT stocks. Despite some tier-II companies underperforming in Q1, the report stated that the management commentaries remain positive for the rest of FY25, as reflected in a 14 per cent valuation premium over tier-I (up from parity last quarter). Nevertheless, tier-II earnings growth may face pressure due to weak Q1 margins and pending wage revisions.
Deal wins in the IT sector were led by CPG & Retail and Technology among verticals in August 2024. Deal announcements in the Technology vertical, BNP Paribas said, were robust after staying muted for the last several months. Among geographies, Europe dominated deal-win announcements (8), followed by North America (6) and RoW (3). Most deal wins announced were related to digital transformation and technology modernisation. Accenture and HPE closed the highest number of deals (3 each) in August, the report added.
| Company | Deal wins |
| Accenture | 3 deals: Social Security Administration (SSA), Teachers Insurance and Annuity Association of America (TIAA), United States Patent and Trademark Office (USPTO) |
| HPE | 3 deals: Berger paint, Toyo Tire, Nobu Hotels |
| Capgemini | 2 deals: Defence Science And Technology Laboratory, Swedish Armed Forces |
| Tech Mahindra | 2 deals: Ooredoo, Marshall Group |
| Wipro | 2 deals: John Lewis Partnership (JLP), Cyble |
| DXC | 1 deal: Pluxee |
| HCL Tech | 1 deal: Xerox |
| Infosys | 1 deal: ServiceNow |
| LTI Mindtree | 1 deal: Exyte |
| TCS | 1 deal: Primark |
Progress in GenAI
The IT sector has recorded multiple partnerships and alliances in GenAI. Tech Mahindra and Google Cloud partnered to boost GenAI adoption and lead digital transformation for Mahindra Group entities. Separately, Accenture and S&P Global partnered to enable customers and employees to harness the full potential of GenAI.
M&A and management changes during August
In terms of mergers and acquisitions (M&A), BNP Paribas said Accenture’s acquisition of Boslan, a provider of management services for large infrastructure projects, and Consus.health, a service provider for medical strategy and patient management, were the highlights of the month. Accenture did two acquisitions last month, and HPE and Capgemini did one each. Now in terms of management changes, HCL Tech and Mphasis appointed new CFOs, while Accenture appointed Group CEO of Accenture Operations and Global Communications, Media & Technology industry practices chair. Wipro’s CTO exit was a key senior level departure during the month.