Tech Mahindra has announced that Mohit Joshi, President of Infosys, will become their next CEO and Managing Director, effective from December 20. Joshi's appointment comes after he resigned from Infosys on March 11 after 22 years with the company.
As the new CEO, Joshi will need to address issues with execution, particularly in achieving a good balance of industry-matching revenue growth and respectable EBIT margin. Although the company has been making efforts to shift from a Telecom-heavy business to a more enterprise-oriented one, this transition has not been entirely smooth, per analysts.
Joshi will be appointed as Managing Director and CEO with effect from December 20, Tech Mahindra said in a stock exchange filing.
“Appointment of Mr. Mohit Joshi, (DIN: 08339247) as Managing Director and Chief Executive Officer of the Company and Key Managerial Personnel under the Companies Act, 2013, for a period of 5 (five) years with effect from 20th December, 2023 to 19th December, 2028 (both days inclusive),” the company said.
Current CEO CP Gurnani’s term ends on December 19.
In a statement, Tech Mahindra said Joshi will join "well before the date" of his appointment as CEO and MD to allow for sufficient transition time.
During the recent investor meet, Gurnani said that there will be a reasonable transition period between his moving on and the new CEO taking over and that he will guide — along with the rest of the leadership — during the transition.
“This is a running train. There will be a reasonable transition period between me and the new leader. Clearly, the assumption is that the leadership team is here to stay and I will be a part of the team which will make sure the transition happens,” he had said.
Joshi's tenure at Infosys will come to an end in June and till then he will be on leave. This marks the second big exit for the company in recent months, after Ravi Kumar S, also a former Infosys President, who exited the company and took over the role of Cognizant CEO in January.
Tech Mahindra NRC Chairperson TN Manoharan said in a statement, “Mohit’s appointment is the successful culmination of a rigorous selection process during which the NRC evaluated a number of internal and external candidates. Mohit’s experience with digital transformation, new technologies and large deals will complement Tech Mahindra’s strategies and continue to build on the strong growth momentum demonstrated by the company."
Analysts have said that the company needs to fix execution, at a time it hasn't been able to deliver industry-leading revenue growth rates, and hasn't been able to shore up its profit margins.
In a note after the recent investor meet, Nirmal Bang Institutional Equities said that the new CEO needs to fix execution, but there's little that they disagree with on the company's strategies.
"The key challenge has been to deliver a good balance of industry-matching revenue growth and respectable EBIT margin, something TML has struggled with....But, with net new TCV in a higher band over the last many quarters, getting clients to move to execution and extraction of higher margins will be key tasks for the new CEO," the note read.
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