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Bengaluru-based IT services company, Infosys, has announced a significant deal worth $454 million with Denmark’s Danske Bank. The agreement comes after Tata Consultancy Services (TCS) announced a mega-contract amidst a slowdown in the IT services industry.
According to a regulatory filing, the deal spans five years, with an option to extend for an additional year, for a maximum of three times. Infosys will acquire Danske Bank’s IT center in India as part of the agreement.
The collaboration aims to enhance Danske Bank’s core business by leveraging digital, cloud, and data capabilities, as Infosys CEO Salil Parekh stated.
“Infosys will collaborate with Danske Bank to strengthen their core business with greater digital, cloud, and data capabilities,” said Infosys CEO Salil Parekh.
Infosys anticipates the completion of the transactions before the end of the second quarter of the current financial year. Following the announcement, there was little change in Infosys’ stock price, which has experienced a decline of around 15% year-to-date compared to the relatively stable Nifty IT index.
This deal arrives at a challenging time for Indian IT services companies, as demand in key markets, such as the United States and Europe, has been affected by reduced client spending and concerns over a potential recession. Infosys projected its lowest revenue growth in April in six years due to these slowdown concerns.
The deal with Danske Bank follows TCS’s recent signing of an £840 million contract with the British pension scheme Nest, spanning an initial tenure of ten years. TCS had terminated a $2 billion contract with Transamerica, an insurance provider, citing macroeconomic challenges as one of the contributing factors.