Infosys update: Another billion dollar deal!

Last updated: 23 Dec, 2020 | 10:49 am

Infosys update: Another billion dollar deal!

Infosys has announced a billion dollar deal with Daimler AG, to drive hybrid-cloud powered innovation and IT infrastructure overhaul. While the company has not disclosed the amount, media reports estimate that the deal is worth $3.2 billion, spread over eight years.

What does the deal win mean for Infosys?

  • This latest deal win is bigger than the $1.5 billion deal with Vanguard that the company announced in August. 
  • This deal win will boost Infosys Q3 big deal wins bookings (to be announced in January). Including this, the company takes its mega deal wins to $4.89 billion in H1FY21 (Apr-Sep 20) period. 
  • According to estimates by global firm Macquarie, this deal win will set the stage for a 13.6% dollar revenue growth in Infosys in FY22. Macquarie has maintained an ‘Outperform’ rating on the stock with a target price of ₹1,410. 
  • The company is on track to report double digit revenue growth for the next few years, and has hit a sweet spot in terms of deal wins.

Performance in previous quarter

In the previous quarter, Infosys was able to beat expectations due to its record high deal wins, and cost cuts to maintain its revenue and operational profitability. Large deal wins during the quarter stood at $3.15 billion—higher than the $1.74 billion worth of deals it won in the previous three months of (Apr-Jun).

The Covid-19 pandemic has forced a tectonic shift in businesses processes to move towards greater digitization. This has helped the IT sector to bounce back faster than other industries. Infosys said that the relevance of its is resonating with its clients in these times. The growth in Q2FY21 has improved visibility for the rest of the year for Infosys. The company is also confident of further expanding its revenues and margins going forward.

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