Montreal key to bagging Bombardier deal: Tech Mahindra

Q: Can you give us any more details you have about this deal, Bombardier, the deal size and more importantly at what margins will this deal work out for Tech Mahindra?

A: We have had a long relationship with Bombardier and we are excited because this deal is purely focused on engineering services and we are involved with Bombardier and also with the aerospace industry in general, we provide new product development and that comprises of design, validation of design, we are involved in manufacturing engineering, which we believe has huge potential that includes tool design, manufacturing methods and our industry trends clearly show that aircraft sales is going to dramatically increase.

So we believe that - we call it customer support that will be after market engineering space, services space will be very vibrant. We play an important role in that. We also support our customer in sustainment of their existing product lines and we are leading player in interior design of aircrafts specifically business jets. So I think there is a lot of things that we do and this contract with Bombardier is kind of reflection of the good work we have done in the past and the potential for the future.

We have talked about margins, we don’t normally discuss margins at a deal level or a specific customer level for confidentiality reasons but you are aware overall of the margins that we report.

Q: You gave us a lot of eco system details but you are not giving us much by way of the deal size itself. You have invested a lot in the Canada, about 1,200 people, is that right, your number of people in Canada given this kind of an investment that you have made in Canada, give us some idea of this deal size as well what are you expecting when you say that this is the first of other such deals, approximately are you L1 in some deals, what can you expect in terms of order flow over the next 12 months?

A: Tech Mahindra would classify this as a large deal and anything greater than USD 50 million in size is classified as a large deal. So you could clearly put that in to that category, USD 50 million or higher. So I would clearly put this deal in that category. At this point in time, we have made tremendous investments and I must share with you, we have announced a center in Montreal. We already have a development centre which is focused on financial services in Toronto, which has got about 250 people in the city. What attracted us to Montreal -- the first key thing is there is a huge aerospace cluster which means it is not the aerospace companies alone but tier-I suppliers to all these or to the aerospace industry and we believe that by having a centre in Montreal, we will be able to collaborate better with other tier-I suppliers who bring different skills to the table and to be able to play in that eco system and provide systems integration services which will add better value to our clients.

Secondly, we are the talent that is available in the Montreal market because of the aerospace cluster and more important, the cost of the educational institutions -- a world class university Concordia. So we are excited with the talent that we can hire, train and deploy. So that is number two.

Thirdly, we are very happy with the support that we are getting from the local government.

So these are three factors that has led to this investment in Montreal and yes, we hope to grow this even further but I just wanted to share with you what the key factors that attracted us to Montreal.