Top 4 IT companies see 40% drop in large client additions in FY23

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India's top four IT firms saw an almost 40 per cent drop in large net client additions in the financial year 2022-23 (FY23) as compared to FY22, according to a report in The Economic Times.

The big four IT firms -- Tata Consultancy Services (TCS), Infosys, HCLTech, and Wipro -- added 80 large clients, who are classified as clients who provide deals in the $10 million and $100 million range, in FY23 versus 132 clients in FY22, according to ET’s analysis.

Infosys is the only IT firm whose net client addition remained flat at 23 in FY23. All the other firms added fewer clients. TCS added 33 clients in FY23, recording a drop of 57 per cent over FY22. Wipro added 14 clients in FY23 as compared to 27 in FY22, registering a fall of almost 48.1 per cent. HCL had 21 large client additions in FY23 compared to 30 in the year-ago period.

“Transformational spending will continue now that technology is central to every company’s strategy. But given the macro environment, companies are slowing discretionary spending. This is why we continue to see strong demand for outsourcing, mixed with softened demand for consulting and project-based work,” Namratha Dharshan, chief business leader of India Research at global tech research firm ISG, told The Economic Times.

Industry experts said that the major causes behind the decline in client additions are a slowdown in discretionary spending and weak macros, when compared to the demand upcycle last year. Firms like HCLTech and LTIMindtree noted that clients are giving importance to projects that give them quicker returns and preferring cost-saving deals to reinvest capital into transformation projects.