Tech Mahindra’s chief executive officer and managing director Mohit Joshi has said the IT major’s clients in the US are more bullish on the future than before, as they are hopeful of a conducive regulatory environment under the Trump administration.
The IT industry has been reeling under from the impact of inflationary pressures and demand uncertainty in core geographies like North America where clients have reduced tech budgets.
Speaking to Moneycontrol at the World Economic Forum in Davos, Joshi said though people across the board are now talking about new programmes and pieces of work and there is optimism, it is too early to declare this a trend.
“The US clients do seem to be more optimistic about the future than previously. And I feel that for some industries like the financial services, there is a sense that the regulatory pendulum is moving and so that we're going to get into an era of maybe less intrusive regulation,” he said.
“We're obviously helped by the fact that there has been a huge tailwind from a technology perspective and a huge amount of interest driven largely by artificial intelligence. The first phase of artificial intelligence (AI) was really about buying the hardware and buying the software.”
According to Joshi, the next phase of AI will be to build real-life use cases and applications simplifying and modernising tech stacks.
On deal wins
At the company’s Q3 earnings conference last week, the management said it will be opt for quality over quantity deals.
Explaining it, Joshi said, “We want to make sure that the kinds of deals that we do are profitable for us. So that we see significant headroom for growth. We do deals in our priority markets and with our priority clients.”
In the past couple of quarters, Tech Mahindra’s large deals order book grew from $345 million at the start of Q1 to $745 million at the end of Q3, Joshi said.
Tech Mahindra is in the midst of business restructuring under its new management team led by Joshi. The company is looking to expand and diversify beyond its strong-hold verticals such as communication and telecom to BFSI, healthcare and life sciences.
For the December quarter, Tech Mahindra posted a net profit of Rs 983 crore, up 92.6 percent from the year-ogo period.
Sequentially, net profit declined 21.36 percent. The decline in profit is due to a higher base in previous quarter, which saw a one-time special income from sale of assets. In Q2, the company recorded net profit of Rs 1,250 crore, aided by the sale of a property for Rs 450.2 crore.
Revenue increased 1.4 percent YoY at Rs 13,285 crore. Sequentially, revenue declined 0.21 percent.
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