Amid weaker deal-making and global uncertainties over US tariffs, top Indian IT services firms are expected to renew a flurry of contracts this year.
Infosys, TCS, Wipro, Cognizant, and others are set to renew deals worth $20 billion in 2025, Business Standard reported, citing sources.
Some major IT contracts up for renewal include Tata Consultancy Services' (TCS) deals with Star Alliance and Nielsen, Infosys’ contracts with GE Appliances and Daimler, HCLTech’s agreement with UK-based insurer Chesnara, Wipro’s engagements with German utility E.ON and Brazil’s Petrobras, and Tech Mahindra’s deal with Circle Health.
Most of these contracts were reportedly signed during the pandemic and have a tenure of 3–5 years. However, according to Business Standard, instead of straightforward renewals, many clients may open these deals to competitive bidding.
For instance, Infosys aims to integrate AI into its $3 billion deal with Daimler, potentially extending the partnership beyond 2028. Similarly, Wipro and L&T Technology Services have secured new deals with Phoenix Group and a European automaker, respectively.
During the fourth quarter of FY25, TCS renewed its five-year contracts with Norway’s DNB Bank for a next-gen banking innovation deal and with Coop Danmark for a digital transformation initiative.
‘Weak Q4, Unexciting FY26 Guidance’
"The IT sector is anticipated to report a weak exit for FY25E and provide unexciting guidance for FY26E amid rising global uncertainty. The macroeconomic slowdown has become a baseline scenario, with lower discretionary spending and elongated deal cycles impacting the pace of recovery. Deal activity will be centered more around cost optimization and takeout initiatives," said HDFC Securities in a report on April 4.
In Q4FY25 (Jan–Mar 2025), the brokerage expects most large IT companies to report a slight decline or flat revenue due to weak demand, fewer working days, and reduced discretionary spending. Infosys is expected to see the biggest drop at around -1.8% quarter-on-quarter, followed by smaller declines of about 0.5% for TCS, HCL Tech, Wipro, and Tech Mahindra.
L&T Technology Services is projected to lead with 13.7% growth (boosted by seasonality and an acquisition), followed by Persistent Systems at 3.7%. However, companies like Tata Elxsi, Birlasoft, and Sonata may underperform due to sector-specific or client-related issues.
Looking ahead to FY26, HDFC Securities noted that Infosys is expected to guide for 2–4% revenue growth, HCL Tech for 3–5%, Wipro for -1% to +1.5% in Q1, and L&T Tech for over 10%, including new deals and acquisitions. Margins are expected to remain stable or improve slightly, supported by favorable currency movements and easing supply-side pressures. However, the total contract value (TCV) may remain muted due to the lack of large deals. While there were hopes of a recovery in discretionary spending, ongoing macroeconomic uncertainty may delay that further.
