Deal-win announcements in November moderated slightly month-over-month (m-m), analysts have pointed out. Most of the recent recovery in deal signings is driven by the rest of the world (RoW), they noted.

According to a BNP Paribas report, among geographies, deal-win announcements were dominated by Europe with six from the region, These announcements remained strong in RoW with five and slowed down in North America with four.

Of the six deals from Europe, two were from the manufacturing vertical, and one each from the BFSI and Energy & Utilities verticals. RoW saw two deals from CPG & Retail and one from the Energy & Utilities vertical. However, most deal wins announced were related to digital transformation.

Closed three deals

The report noted that IBM closed three deals with Ferrari S.p.A., UFC, and GSA, followed by Accenture (Kayana Solutions and Puma India), TCS (Air France-KLM and SPARSH), Wipro (Sipchem and Marelli), and HCLTech (Tasman District Council and Blue Yonder Warehouse Management), closed two deals each in November. This was followed by LTI Mindtree (Nexi Group), Cognizant (Savvas Learning Company), Atos (Eurocontrol), and HPE (RWE) with one each.

“The 3M rolling sum of deal signings, which is a strong one-quarter lead indicator of deal TCVs, remained strong in November; albeit it saw some moderation sequentially. The energy & utilities and manufacturing verticals witnessed an uptick in deal announcements, although it may be a little early to call for their recovery. CPG & retail remained steady m-m and we see the vertical’s revenue growth improving in coming quarters,” the report observed.

“Mega deals have not been happening this year. We have seen a decline in the $1 billion-plus or $500 million has seen a decline this year. But a spike in the number of deals less than $50 million has been observed, with more mid-level or smaller deals. It compares with what happens in the macro environment,” said Pareekh Jain, CEO at Pareekh Consulting and EIIRTrend.

In many emerging markets, digitalization is happening, he observed. While now there are several opportunities in emerging markets, earlier, the companies were not that interested also, because the US and UK markets were growing. Generally, these emerging markets, including India, do not have high margins.

“But when the growth is coming down, they are not also evaluating these markets aggressively. That has changed because last year’s growth outlook was not good for the US and Europe. The emerging market share has been increasing. India has been good for TCS, specifically with the BSNL deal.”

He added that while BFSI has turned around, but not telecom and hi-tech. Another vertical that deteriorated in the last three months was automotive. Among those performing well are healthcare, travel, and energy & utilities.

A Motilal Oswal report also pointed out that the IT services sector could be on the cusp of recovery after enduring a prolonged period of discretionary spending cuts. “As we look ahead to the next 2-4 years, the harsh winter appears to be behind us, and the foundations for a sustained revival in the flow of business and smaller deals are being laid,” it said.