New Delhi: Chinese technology company Lenovo Corp. overtook US-based Hewlett-Packard Co. (HP) to become the largest personal computer (PC) vendor in India in the three months to December as it benefited from large government contracts.

According to data released by research firm Gartner Inc. on Wednesday, Lenovo posted the highest increase in its India market share for the PC segment.

Lenovo’s PC shipments accounted for more than a quarter of the total market, with its share reaching 25.3% in the three months to December from 18% in the year-ago period.

HP’s market share fell to 23.3% in quarter from 25.5% in the year-ago period.

Dell Inc, the third largest PC vendor in the country, saw a decline in market share to 20.6% in the quarter from 24.1% a year earlier.

“Lenovo moved into the number one position in PC shipment in India in the fourth quarter of 2015 due to the state government order execution in the quarter which helped Lenovo experience the largest increase in market share,” Gartner said in its report.

PC shipments in India totalled almost 2.6 million units in the fourth quarter of 2015, a 10.6% increase over the fourth quarter of 2014.

Vishal Tripathi, research director at Gartner, said individual consumers accounted for 40% of total PC sales in the fourth quarter of 2015, down from 52% last year.

“The PC market in India is facing some challenging market dynamics,” said Tripathi. “The enterprise segment might witness some growth going forward due to government and education projects; however, we do not foresee significant growth in the PC market in India.”

Globally, Lenovo has maintained its leadership with 20.3% market share in the PC market, followed by HP with 18.8%.

In the fourth quarter, Lenovo executed a deal with Electronics Corporation of Tamil Nadu Ltd (ELCOT) which helped it come out on top.

According to industry estimates, the deal was executed in five phases with Lenovo supplying more than four million PCs to the Tamil Nadu government, the last tranche of which was executed in the fourth quarter. Lenovo delivered 242,000 PC units to ELCOT in the quarter.

The large government deal that Lenovo executed in the quarter did play a big part in expanding the market share, but that is not the only reason the company was able to get ahead of its peers, according to Rahul Agarwal, managing director, Lenovo.

“The government deals did play a god part, but we are seeing an increase in all the segments including consumers, SMBs (small and medium businesses) and large enterprises,” said Agarwal over the phone. “We are on the growth path, and the overall momentum is upbeat. We are focusing on segments like SMBs and enterprise to keep it going.”

Industry analysts remain a little skeptical about Lenovo maintaining the lead in the market going forward.

“Lenovo executed a big government deal with ELCOT. Other players such as HP and Acer also participated in deals with ELCOT, but of smaller size,” said Tripathi. “It was a one- time gain for Lenovo. Now the project is over, it will be close race (going forward ).”

“Since it is the first quarter of the year, there would be some government buying as they have to exhaust the budget before the next fiscal starts. But after that, we expect to see decline in numbers,” he added.