HCL Technologies Ltd has won a $1.14 billion contract from Mercedes-Benz that was previously held by rival Infosys Ltd, three people aware of the matter said, in the first mega-deal for India’s third-largest information technology (IT) services company in three years.
The Noida-based company did not name the German carmaker in its press statement, calling it a significant strategic partnership with a “Europe-headquartered, Fortune Global 50 firm”. Under the five-year contract, HCLTech will establish an AI-driven operating model to transform and manage the company’s global digital workplace and enterprise networks, the statement said.
The contract requires HCLTech to manage IT procurement, including supplying Mercedes-Benz employees with hardware and software across its laptops and servers, the people cited above said on the condition of anonymity. Its last mega-deal -- valued at over $1 billion -- came in August 2023, when it inked a $2.1 billion managed services contract with US telecom firm Verizon for six years.
HCLTech is now assured $228 million in annual revenue, translating to about 1.6% growth in FY27. The incremental revenue is the same as the amount that Infosys lost from Mercedes-Benz not too long ago. However, according to the people cited above, the Mercedes-Benz contract comes with an operating margin lower than HCLTech’s 17.2%.
Infosys signed an eight-year IT transformation deal valued at $3.2 billion with Daimler in December 2020, a year before the German entity split into Mercedes-Benz Group and Daimler Trucks, making it one of its three largest clients. Infosys was to provide services across six business divisions – network services, cybersecurity, SAP software, data centres, after-sales call services and workplace solutions or IT procurement, the biggest of the six arms.
After the 2021 split, both Mercedes-Benz Group and Daimler Trucks retained Infosys as their IT services vendor. However, Infosys risked losing over a third of its $400 million annual revenue from Daimler as the German group sought new IT vendors for software and equipment following execution delays, Mint reported first on 12 January.
Cognizant Technology Solutions Corp. snapped up a portion of the deal in March, when it bagged a multi-year contract with Daimler Trucks valued at more than $300 million.
Late last month, Infosys lost the workplace solutions and network services portions of the deal from Mercedes-Benz, according to one of the three people cited above. HCLTech snapped up these portions, the people said.
Workplace solutions was the biggest chunk of Infosys’s Daimler deal signed in 2021. According to the second person, it made up more than two-fifths of the deal, fetching about $160 million last year. Network solutions brought in $65 million annually, taking the total to $225 million—the same amount that HCLTech is expected to get.
“We kindly ask for your understanding that Mercedes-Benz does not comment on deal specifics,” Mercedes-Benz said in an emailed response to Mint’s queries on Friday.
Emails sent to Infosys and HCLTech went unanswered.
Investors cheered the mega-deal, with HCLTech closing 5.8% higher on the BSE on Friday.
The contract comes when growth appeared elusive in this fiscal, primarily due to the rise of automation tools eating up much of the work handled by IT services firms and geopolitical tensions forcing clients to pull back their tech spending.
“The deal also strengthens HCLTech’s credibility in large-scale competitive pursuits at a time when enterprises are consolidating strategic technology partners,” said Phil Fersht, chief executive of HFS Research.
This deal comes a month after HCLTech picked up a stake in an AI firm, the first tech services firm to do so. On 17 June, HCLTech acquired 10% in Sarvam AI, a Bengaluru-based startup that provides AI models in Indian languages, for about $150 million.
HCLTech ended last year with $14.66 billion in revenue, up 6%, making it the fastest-growing tech services firm among the top five. The new deal is expected to come as a shot in the arm for the company, which had outlined slower growth in the fiscal in April.
HCLTech expects growth of 1% to 4% in constant currency terms, compared with 2-5% outlined in April 2025. Constant currency does not take currency fluctuations into account. The deal, extendable by five years, should boost its Europe revenue, which makes up a little more than a fourth of the total.
This is the third mega-deal under CEO C. Vijayakumar, who took over in October 2016. The company first won an IT outsourcing deal with Xerox worth $1.3 billion in 2019.
The deal also marks Indian IT’s first mega-deal in FY27 and the fourth since January 2024. It comes nine months after two of its larger peers ended their own two-year mega-deal drought.
In October, Infosys Ltd bagged an IT modernization contract with the UK’s National Health Service. The deal valued at $1.6 billion runs for 15 years.
Two months later, Tata Consultancy Services Ltd won a deal valued at more than $1 billion over 10 years from Telefónica UK, the British arm of Spanish telecom giant Telefónica. The country’s largest tech services firm also won a 15-year deal worth $2.5 billion with Aviva, a British insurance company, in January 2024.
In October last year, mid-sized IT company Coforge Ltd announced its largest deal, a 13-year contract worth $1.56 billion with Sabre Corp., a Southlake, Texas-based travel technology company. As part of the deal signed in March last year, Coforge will handle software product delivery and AI functions for Sabre.