Mid-tiers outpace large peers in Americas

Bengaluru: The aggregate incremental revenue of tier-1 Indian IT firms was a mere $84 million in the Americas in the 2024-25 financial year compared to $538 million that mid-tier companies added in the same geography in the last financial year. The 2024-25 financial year marks another year of underwhelming performance in the Americas region, which represents 55% of revenue for tier-1 companies. The region contributed merely 4% to the additional revenue during the same period for tier-1 firms, while India and Rest of World markets delivered most of the growth.

HCLTech achieved the leading position in relative market share among tier-1 companies, contributing $399 million to the total incremental revenue. “This implies that tier-2s are in a better position to deliver higher or similar growth for FY26 vs tier-1s, which are likely to deliver lower growth vs the prior year. The only scenario where this gets challenged is if there is a recession in the US, which could lead to a faster deterioration for tier-2s considering the high client concentration vs tier-1s,” wrote Nitin Padmanabhan, lead analyst IT and telecom at financial services company Investec.

Peter Bendor-Samuel, Founder and Chairman of Everest Group, said, “HCLTech benefitted disproportionately from the contribution of a few large deals in the US over most of the 2024-25 financial year, including a 6-year $2.1 billion Verizon deal (annual contract value of $350 million), and a large retail and CPG deal.” He said beyond these few large deals, the Americas were not very strong for HCLTech. “Also, the lumpy nature of revenue is reflecting in growth numbers of the Americas for them as these deals annualise. For instance, for the Mar quarter of FY2025, the growth from the Americas market of HCLTech was 0.1% versus the first nine months' growth of 7.2%,” he said.


Phil Fersht , CEO of HfS Research, said that this reflects the changing market dynamics as the traditional labour-heavy services model continues to lose steam and enterprise clients are focusing more on working with smaller providers which offer them greater intimacy and are more flexible with their pricing models. “Big is no longer beautiful as the focus on developing AI infrastructures takes hold,” he said.

Investec said that Infosys led market-share gains in BFSI and manufacturing, accounting for 100% of the incremental revenue accretion by tier-1s in both verticals. HCLTech led market share gains in the communications vertical, while TCS led gains primarily driven by the BSNL deal. There were persistent market share gains across both tier-1s and tier-2s in the healthcare vertical, led by strong growth in the top customer.