India’s largest information technology (IT) services firms, Infosys, is at risk of losing approximately $150 million in annual revenue from one of its biggest clients as part of a longstanding contract.
Daimler, the German automotive giant, is evaluating alternatives for parts of the work currently handled by Infosys, which could see a significant portion of the contract shift to a new vendor.
Industry sources familiar with the matter told LiveMint that the potential revenue loss stems from execution delays and disagreements over billing under an existing engagement with Daimler. Due to this, Daimler may shift to a new vendor.
Workplace Solutions Segment Under Pressure
The revenue at stake relates primarily to the workplace solutions segment of a broader $3.2 billion, eight-year IT transformation deal signed between Infosys and Daimler in December 2020. Under this segment, Infosys has been responsible for procuring and supplying hardware and software, including laptops, licences for Microsoft 365, and related equipment - for Daimler’s back-end IT operations.
According to the report, the renewal of this part of the contract has stalled due to differences over execution and billing, with a request for proposal floated by Infosys reportedly not agreed to by the client. Daimler and its divisions - including Mercedes-Benz Group and Daimler Trucks - have also delayed certain renewals and owe Infosys nearly $47 million in payments dating back to 2021.
Impact on Infosys Revenue and Growth Prospects
The potential loss equates to around 0.7 percent of Infosys’s total business, based on its $19.28 billion revenue in the fiscal year ended March 2025, and represents more than a third of the roughly $400 million annual revenue the company derives from the Daimler account.
Analysts and industry observers cited in the report suggest that even if parts of the engagement are renewed, pricing pressure and rationalisation of the scope may limit meaningful growth from the Daimler account in the near term.
Infosys is due to announce its third-quarter results on January 14, and the company anticipates ending the current fiscal year with modest revenue growth amid broader uncertainties in client spending across the global IT sector.
