Tech Mahindra signed $1 billion worth of total contract value (TCV) in the quarter ended March 31, 2021. C P Gurnani, managing director & chief executive officer, and Vivek Agarwal, president — BFSI, HLS and corporate development, in an interview with Shivani Shinde, talk on the business momentum and M&A pace. Edited excerpts:
Q4 has seen TCV of $1 billion being signed. Do you think you can see a similar momentum, going ahead?
Gurnani: This quarter was very well balanced when it comes to growth. The deal momentum should continue for the next four quarters. Overall, the deal pipeline is the best I have seen in the last few years. I think we will be able to do a double-digit growth for FY22. The telecom business is benefiting from digital transformation deals and 5G roll out. And, the enterprise business is seeing demand for Cloud, cybersecurity, and human experience management as well as customer experience management. The shift from legacy to digital is at the heart of whatever we are doing, and Cloud, AI and cybersecurity are clear tech drivers.
Will the second wave impact productivity?
Gurnani: We have global delivery centres in Europe, the US, Asia and even in tier 2 cities in India. The business continuity is built into the global delivery centres. There will be some of us who would be impacted by Covid, but it’s not that the entire city will shut down. In the past one year, work from home/ anywhere has become a reality. Even when our employees were taking care of their families, our attendance shortfall in Pune and Mumbai was never more than 1.5 per cent. Employee productivity will be high, global distribution will continue and the system is a lot more resilient.
How significant will M&As be?
Agarwal: We evaluate deals on the opportunities we get. The strategy is to find pockets that accelerate our growth and add relevance to clients. A lot of deal wins are in digital transformation — as you get large deals — while there is an outsourcing element also. Largely, the trigger point is transformation and shift from legacy to digital cloud, among others. We will position ourselves which allows us to go after such deals.
What are the margin levers, going ahead?
Gurnani: There are factors like salary increases, but we do have operating levers. If revenue grows, margins can be managed. We do have plans to continue our focus on operating lever. There is room for margin improvement.
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