The only two survivors of Monday mayhem on Dalal Street

Indian equities joined the global market meltdown on Monday as the Silicon Valley Bank collapse sparked an intense bout of soul-searching among US regulators, lenders and corporates, with fears of a broader contagion clouding the near-term outlook for world stocks.

While the US Treasury Department and Federal Reserve stepped in to assure depositors of Silicon Valley Bank (SVB) that their funds are safe, the lender’s stockholders and unsecured creditors were offered no such reprieve.

Not to mention its vast roster of startup clients. Or SVB’s senior management, who, it seems, were the only people in the financial world who were unaware that interest rates were heading northward. (Or that things like interest rate hedging exist).

With Dalal Street bathed in a sea of red, there were only two entities which held their own on a brutal day – Tech Mahindra, and its knight in shining armour (going by the market reaction) – Mohit Joshi.

Joshi, an Infosys veteran with over two decades of experience across enterprise technology software and consulting domains, was named the next MD and CEO of Tech Mahindra on Sunday. He will succeed CP Gurnani, who retires in December this year.

The news turbocharged the Tech Mahindra stock from the moment markets opened on Monday, despite analysts urging shareholders to temper their enthusiasm.

“Great CEO choice, but a turnaround is not easy and will take time. Tech Mahindra faces structural challenges in matching leading peers in organic growth and margin,” said analysts at JPMorgan.

They believe the stock can re-rate marginally in the near term but a structural re-rating can happen only over the medium term. They have a ‘neutral’ rating on the stock with a target of Rs 1,100 per share.

Citi echoed the views.

“The real test of performance will start next calendar year once Mohit Joshi assumes the CEO role. The market will again focus on the pace of turnaround, which can potentially take time,” it said.

The brokerage has a 'neutral' rating on the stock with a target of Rs 1,120 per share.

But as the market repeatedly shows, excitement trumps analysis, at least in the short run.

The Tech Mahindra counter was on a tear since the opening session and closed with stellar gains of 6.83 percent at Rs 1,133.60 on the BSE. It was the sole stock to finish in the green in the Sensex pack.

In a cruel twist of fate, Infosys tumbled over 2 percent as analysts hauled up the firm for its poor showing in retaining senior executives.

JPMorgan noted that Joshi’s departure highlights the depth of Infosys' leadership and the inability to provide adequate career mobility to senior talent. In just six months, this is Infosys’ second loss of a senior leader to a tier-1 rival. (In October 2022, Infosys President Ravi Kumar resigned to take charge as the top boss of Cognizant).

CLSA has also noted that Infosys will need to find a quick replacement to ensure minimal business disruptions.

Speaking of disruptions, it is a race against time in the US as the government scrambles to find a suitor for SVB. Across the Atlantic, HSBC announced the acquisition of SVB’s UK subsidiary for an eye-watering price of £1.

Will some similarly deep-pocketed benefactor swoop in at the last moment to rescue SVB, or will the venture capitalists and tech bros get a sobering lesson on how capitalism can also be a two-way street?

Now that is a cliffhanger even SS Rajamouli would be proud of.