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ICICI Securities Report
Global managed services (IT services) annual contract value in Q2 CY22 was at $8.8 billion (up 1.1% QoQ, 2.3% YoY), but YoY growth rate considerably moderated during the quarter.
Managed services ACV in America dipped QoQ to $4.1 billion (down 8.9% QoQ, flat YoY) while Europe, the Middle East and Africa ACV was healthy at $3.9 billion (up 2.6% QoQ, 11.4% YoY).
Deal activity declined 6.5% QoQ and rose 9% YoY. Q2 saw nine mega deal wins, but majority were restructured contracts.
ISG has reduced its global managed services ACV growth forecast to 3.5% YoY from earlier 5.1% for CY22E. ACV grew 8% YoY in H1 CY22 implying down 1% YoY growth in ACV during H2 CY22.
This is in line with our expectations of growth normalising ahead. ISG attributes its reduced forecast to:
sharp decline in legacy infrastructure services,
high base of last year,
150-200 basis points cross-currency headwinds, and
macro uncertainties.
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