A $454 million contract was inked by Denmark’s Danske Bank and Infosys (INFY.NS), the No. 2 IT services provider in India, at a time when the industry as a whole is experiencing a slowdown due to an unsteady global economy.
In a regulatory filing, the IT firm stated that it will assist the lender in digitising its core business and expanding its cloud and data infrastructure. This included buying Danske Bank’s Indian IT centre from Infosys.
The agreement is for five years, with the possibility of three further one-year extensions.
The contract between British pension plan Nest and Bengaluru-based Infosys came days after Mumbai-based bigger rival TCS signed a deal worth 840 million pounds with Nest.
Even still, at least one analyst opined that the contracts might not be sufficient to change the industry’s course.
Akshara Bassi, an analyst at Counterpoint Research, said on the Danske Bank agreement: “Despite a strengthened order pipeline, the effects of this deal might be offset by macro factors such as inflation and increased labour costs.”
After the news of the purchase, the company’s shares, which has its headquarters in Bengaluru, barely changed. The stock has lost around 15% of its value so far this year, while the Nifty IT index (.NIFTYIT) has barely changed.
According to Infosys, which anticipates the transaction to close before the second quarter of this fiscal year, sales growth would reach a six-year low this fiscal year due to slowdown concerns.