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Tech Mahindra: Becoming Future Ready

At a time when investors were losing sleep over the slowdown in the IT sector and jittery global announcements, this IT giant, against all external headwinds, stood firm and strong

Photo Credit : Ritesh Sharma

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At a time when investors were losing sleep over the slowdown in the IT sector and jittery global announcements, this IT giant, against all external headwinds, stood firm and strong.

As C.P. Gurnani, MD & CEO, Tech Mahindra says, “The future will not see the big beating the small; the future will see the fast beating the slow.” The third quarter results of the company have vindicated Gurnani, with Tech Mahindra standing at the number 1 position of BW’s India’s Fastest Growing Companies rankings in its respected category.

The company posted a 14 per cent jump in consolidated net profit at Rs 856 crore for the third quarter ended December, in comparison to the last fiscal net profit of Rs 751.3 crore.

Tech Mahindra did face hiccups in its previous quarters with declining net profits. However, it bounced back with a steady progress in the deals signing, digital transformation and inorganic growth of the non-telecom verticals. The organic growth of the company was tapered, but stayed ahead of the industry average.
Gurnani says, “Both our organic and inorganic growth are key pillars of our overall growth strategy. Acquisitions accelerate the growth process by enhancing our capabilities and preparing for the future.”

Unlike most IT companies, Tech Mahindra is on a spree to capitalise on its aggressive M&A deals and strategic acquisitions in the enterprise business.

It’s a brilliant stroke. Acquiring a specific expertise with the cross sell of the existing services, tapping on to the new client base. This is evidently reflected in the company’s previous and ongoing deals. The company recently announced the acquisition of CJS Solutions Group LLC (The HCI Group), a US-based healthcare information technology consulting company. This acquisition comes in the footsteps of similar acquisitions last year including Target, a BPaaS (business process as a service) provider to BFSI customers in May and Bio Agency, a digital company in June.

Communications, which is still the largest business vertical for Tech Mahindra, picked up momentum, registering a 1.7 per cent sequential growth in revenue. The restructuring of the Lightbridge Communications Corporation (LCC) business portfolio, which it acquired in 2014, will be positive in the long term for the company. The acquisition had given Tech Mahindra an opportunity to offer a full range of network services and integrated infrastructure solutions.

Tech Mahindra, amongst this whole scenario, understood the need to adapt to the changing times and develop skills in digital technologies to survive the competition and grow revenues. Gurnani says that its DAVID (Digitalisation, Automation, Verticalisation, Innovation and Disruption) strategy lies at the centre of whatever investments the company makes for the future. He terms it as the ‘IT to DT journey’, a journey the company undertook to become a Digital Transformation (DT) player, not just an Information Technology (IT) player.

“The future is also about designing and styling, which are going to play a crucial role in providing the right kind of experience. From that point of view, combining the capabilities of Pininfarina and Bio Agency which we acquired in the past, TechM is in a unique position of taking physical products to a digital world.”

The company has made itself future ready. “The new opportunities in the future will primarily come around digital transformation including IoT (Internet of Things), AI (Artificial Intelligence), machine learning, cognitive, customer experience, platforms, analytics and security. These are the areas where Tech Mahindra is in a stronger position and has built deep domain capabilities,” says Gurnani.


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