MEGA DEALS & DONTS

The string of multi-billion-dollar deals struck by Indian IT giants in recent months makes the sector an attractive investment bet. But investors rushing to put their money into these companies should know that these deals will translate into gains for them only in the long term

- Rohit Chintapali

ROMINENT IT COMPANIES such as TCS, Infosys, Wipro, and HCLTech have recently sealed huge deals that hold profound implications for the industry's trajectory. But what do these deals mean for investors? In June, TCS unveiled a mega deal with UK's National Employment Savings Trust (NEST). The £840 million (approximately $1.1 billion) agreement is for a 10-year period. If extended across its full 18-year duration, the contract's maximum estimated worth could reach £1.5 billion (about $1.9 billion). The agreement encompasses a minimum 10-year term, with potential extensions of up to five years and an additional three-year exit option.

In September, TCS struck another mega deal with Jaguar Land Rover (JLR), a wholly-owned subsidiary of Tata Motors. The £800-million agreement is for five years. TCS has been enlisted to develop advanced digital services tailored to JLR's luxury car customers.

Meanwhile, HCLTech unveiled a staggering $2.1 billion pact with Verizon. It hopes to secure more substantial mega deals in the forthcoming quarters. HCLTech's CEO C. Vijayakumar, in an interview with a media outlet, revealed a robust deal pipeline since Q1 FY24, and expressed confidence in Q2 FY24 contributing significantly to the company's bookings. He underlined the prospect of fulfilling the projected 6-8 per cent year-on-year (CC revenue growth) guidance for the fiscal year (FY24), propelled by the current trajectory and prospective developments.