The Illusion of “Strong Wins”: What Indian IT Firms Aren’t Telling You .

The Illusion of “Strong Wins”: What Indian IT Firms Aren’t Telling You 🚩

1. TCV vs Revenue: Winning the Headlines, Not the Balance Sheets

Indian IT companies frequently trumpet their Total Contract Value (TCV) to signal robust business momentum. In quarters with sluggish revenue growth, TCV becomes the go-to figure to suggest brighter days ahead. But while TCV growth remains strong, actual reported revenue lags, exposing a widening gap between promise and performance.

2. The Growing Disconnect

Over the past few years, the divergence between TCV and recognized revenue has grown increasingly stark. Many deals are long‑dated, conditional, or structured in phases—leading to inflated short‑term optimism in TCV numbers, while revenue recognition is slower, often drawn out over the lifetime of the contract.

3. Why the Discrepancy Exists

• Inflated deal values not translating immediately into revenue: Contracts may span several years or hinge on deliverables to earn full value.

• Selective disclosure: Companies highlight headline TCV figures but often give limited context about when and how those deals convert into real revenue.

• Investor narrative management: Emphasizing TCV masks underlying concerns about margin pressure, client churn, and weak execution timelines.

4. What Investors and Stakeholders Should Ask

1. How much of the disclosed TCV is already converted into booked revenue?

2. When is revenue expected to be recognized—and what percentage is front- or back‑ended?

3. What are the client trust metrics and renewal rates underpinning these high-value deals?

4. Is the firm retaining clients long term, or merely posting one-off engagements?

5. A Call for Transparency

It’s one thing to win a large deal; it’s another to convert, execute, and retain it profitably. Without granular, honest disclosures on execution timelines, client retention and margins, investors and analysts are left navigating in the dark. A stronger narrative would tie TCV progress to a clear roadmap of execution, revenue realization, and meaningful growth.

Why This Matters

For Indian IT firms, TCV is handy for projections—but it’s not a substitute for performance. Thinking that “strong deal wins” alone ensure growth is risky. Financial auditors, analysts, and leadership should look beyond top-line deal announcements and demand clarity on real revenue flows, timelines, and business sustainability.

In Summary

Metric	What It Illustrates
TCV	Deal momentum and pipeline strength—but not actual earnings
Revenue	What has been realized and booked financially
Growth Gap	If revenue lags TCV too much, operational execution may be weak