Synopsis–Tech Mahindra chief executive CP Gurnani said the IT services provider is on a growth path as its core telecom customers as well as enterprises step up spending on digital technologies
Tech Mahindra chief executive CP Gurnani said the IT services provider is on a growth path as its core telecom customers as well as enterprises step up spending on digital technologies. Gurnani told ET’s Priyanka Sangani and Raghu Krishnan that the company is also setting up Covid-care centres within campus to tackle a surge in infections during the second wave. Edited excerpts:
You said you are transitioning from ‘repair’ to ‘grow’. Could you elaborate?
We had set for ourselves three phases: repair, rally and rise. In the repair phase, we had to do the right portfolio mix. EBIT margins have improved by almost 260-270 basis points.
We had to balance the growth patterns between enterprise and communication business. We have succeeded because the results show for themselves. Signing of large deals has increased. In the previous quarter, we signed about $450 million (worth deals) and in the fourth quarter, we signed over $1 billion deals, and both the communication and enterprise business contributed equally. We don’t give a forecast, but organically we should be able to deliver double-digit growth in FY22.
Which are the areas witnessing growth?
In telecom, there is a healthy appetite for both digital transformation and for 5G. So, I think those are the two vectors which will define how the communication business will grow. For enterprise business, the focus is clearly more on digital product engineering and digital transformation, aided by cloud and cybersecurity.
Going into FY 22, are there any major concerns beyond the current situation in India, at the global level?
Running an IT business is like playing Snakes and Ladders. Three weeks ago, who would have thought (the second wave) would practically close down most of India. It is always a concern. The best part is the confidence level of the US, and many parts of Europe is much higher than it used to be. I look at more ladders than snakes. Frankly, even in the India situation, the way various foreign governments, embassies are working to get the requisite medical supplies and equipment into the country, I think in a few weeks you will start seeing the stress levels going down dramatically.
Are you putting together dedicated teams to go after large deals?
We already have two dedicated teams each for enterprise and telecom customers. The deal pipeline is good. All of us have different competencies and they (large deal teams) bring it together. It is like running a few distributed kitchens and you need a system integrator to bring all the kitchens together. In a way, the people in front don’t have to spend time trying to talk to different kitchens together to put together a Rajasthani thali.
Is delivering services a challenge due to the surge in caseloads in India?
Employee wellness comes above any other factor. We have actually extended it to their families. So, (whether it is) vaccination, building extended hospitals or looking at how we can help state governments. We run health academies as part of our CSR initiative that has a database of where equipment or medicines could be. These initiatives have worked well. We always ran (distributed) global delivery centres. We have five delivery centres in North America, big delivery centres in Europe and about seven in Asia. We are in almost every state in India.
Do you think the pace of 5G rollouts will pick up in FY22?
Even 4G (rollout) has not become 100%. For 5G, yes, there is a setback of almost a year. People in the telecom industry will say that in FY21 they were not able to introduce many new services. There will be an impact, but in general, if all of them had come together, we would have had a problem of supply. So, we’re getting two or three (deals) a quarter, we’re happy.
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