Infosys Faces US$150 Million Annual Revenue Risk as Daimler Eyes New Vendor

Infosys may lose US$150 million per year from Daimler, one of its largest clients, as the German automaker considers switching to a new vendor. The risk arises from execution delays and billing differences under the IT procurement portion of their contract.

Daimler Owes US$47 Million Since 2021 to Infosys

The company had signed a US$3.2 billion, eight-year IT transformation deal with Daimler in December 2020, covering IT procurement, network services, cybersecurity, SAP, data centres, and call services. 

While some segments, such as cybersecurity and data centres, have been renewed until 2029, other areas like SAP, workplace solutions, and network services are yet to be fully renewed. Daimler owes Infosys nearly US$47 million in unpaid dues since 2021.

Infosys Could Lose 0.7% of Total Business 

The potential loss represents about 0.7% of Infosys’ total business and a third of revenue from Daimler. With the workplace solutions portion uncertain, Infosys may face challenges in replacing this revenue in the near term, especially amid macroeconomic pressures, tariff issues, and automation reducing client IT spending.

Infosys Automotive and Mobility GmbH Financial Performance

Infosys’ Daimler unit, Infosys Automotive and Mobility GmbH, saw revenue decline 8.5% in FY25 after years of growth exceeding 40% annually. The unit has also been unprofitable for 4 consecutive years, indicating that the contract has matured and incremental gains may be limited.

Is This Situation Unique to Infosys? 

This situation is not unique to Infosys. Indian IT firms have faced mid-contract renewals or client insourcing before. TCS lost a multi-year contract with Transamerica, and HCLTech saw a decade-long deal with State Street end early due to clients bringing operations in-house.

Despite this, Daimler remains one of Infosys’ three largest clients, along with Apple and JPMorgan Chase, and the company continues to benefit from other mega contracts in sectors like finance, public services, and technology.

Read more: HCLTech Workforce Dips Slightly in Q3FY26, Adds Nearly 2,900 Freshers.

Conclusion

Infosys faces a strategic challenge as Daimler considers a new IT vendor, risking US$150 million in annual revenue. While some segments remain secure, the company will need to manage contract renewals carefully and explore new opportunities to offset potential losses and sustain growth.

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