TCS inks record-breaking $2.25bn deal with Nielsen
Tata Consultancy Services has bagged a $2.25bn outsourcing contract from TV rating firm Nielsen, the biggest ever for an Indian IT firm. It is an extension of a 10-year $1.2bn deal struck in 2008, which was expanded to $2.5bn and extended for three more years (to 2020) in 2013. Nielsen has now extended the deal for another five years to 2025. Here're the details.
What's the new deal about?
Under the renewed contract, Nielsen has committed to purchase at least $320mn in services annually during 2017-20, $186mn annually during 2021-24, and $139.5mn in 2025. Services provided by TCS will include those "relating to IT, business process outsourcing, client service knowledge process outsourcing, management sciences, analytics, and financial planning". It will expire on December 31, 2025, with three one-year renewal options for Nielsen.
What does it mean for TCS?
It is undoubtedly a good deal, but the exact financial impact can't be determined yet. However, an analyst said it would mean a gain of at least $70mn over the older contract, "or at least a 40 basis points positive impact on growth". Though proceedings likely began during N Chandrasekaran's tenure, the deal is a boost for CEO Rajesh Gopinathan, who's 10 months in.
TCS reported most business from North America, BFSI largest sector
In Q2 2017, TCS reported 51.9% business from North America, followed by Europe and Asia-Pacific. India accounted for 6.3%. Banking, financial services and insurance emerged the largest vertical with 33% business, followed by retail and consumer packaged goods (11.9%). The average market value of TCS stood at Rs 4.67L crore during October'16-September'17.
