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Oct 01, 2013 02:23 PM IST | Source: CNBC-TV18

Expect FY14 to be better than FY13: Tech Mahindra

CP Gurnani, MD & CEO, Tech Mahindra expects this year to be better than the two previous years.

In an interview to CNBC-TV18 CP Gurnani, MD & CEO, Tech Mahindra sees two demand patterns for the IT industry. 1) Overall since US and Europe look much better than one had envisaged, the confidence among large global corporations is a lot better this year.

2) There is huge demand for video services, mobility, cloud and security, he adds. So, on the back of these scenarios, Gurnani expects to do better this year than the previous two years.

Tech Mahindra has been one of the best performers and year-do-date the stock is up about 45 percent or so.

Also read: JLR to invest 1.5bn pound in new tech, create 1,700 UK jobs

Below is the verbatim transcript of his interview on CNBC-TV18

Q: We have been talking about how the prospect for the entire IT sector has been picking up, not just because of the rupee depreciation but genuine pick up in demand in the US in data as well, what is your sense on how good the quarters could look because Q2 is traditionally a strong quarter for the IT sector, what could growth look like?

A: I do not want to comment only on Q2. So I would stay with the generics and stay with the trend through the year.  One is very clear about the landscape of IT; there are two demand patterns, which are emerging. One is that there is a huge uptick on video services, mobility, cloud and security. So, we are seeing a lot of new projects coming in these areas.

Two, overall the sentiment particularly in United States and even in parts of Europe is improved and that gives us confidence that the year would be reasonably good and we feel it will be a better year than the previous two years.

Q: Can you give us some numbers on this, how much do you expect revenues or earnings to grow in FY14 more importantly your visibility in FY15?

A: We never give guidance and that is the only reason why I am shying from giving you any numbers to this particular conversation today. You know NASSCOM has estimated growth around 14-15 percent. The reality is that overall industry should just about either meet or exceed that growth projections. One, it is also very clear that some of us would exceed that expectation; some of us will not exceed those expectations. That is number one.

Two, the way I look at it is that Australia elections have just finished. Overall US and Europe is looking much better than what we had all envisaged. The confidence of large global corporation is a lot better this year and that gives me an overall feeling that industry in general will exceed their numbers.

Q: Have you been able to gain any market share in the infrastructure management segment because of the higher amount of deal wins that you have seen?

A: Infrastructure management service is a strong business for me. We do about USD 500 million of business in infrastructure management services. However, unless it is bundled with total managed services - that is IT, infrastructure plus applications plus BPO, we have not individually gone after infrastructure managed services deal.

The reason is very simple, all these deals have a huge transition time, huge knowledge transfer time and I would rather take over a complete managed services and I would rather take over a complete transformational programmes. So, I do infrastructure services but I do not go after individual infrastructure services deals only.

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