The Dealmaker – TechMahindra

When Vineet Nayyar joined Tech Mahindra (called Mahindra British Telecom), it was a mere $110-million company. Today, it has revenues close to $3.9 billion, and is the second biggest company in the Mahindra Group with a share of 23 per cent of group revenues. It is also No. 6 in the Indian IT services pecking order – after TCS, Cognizant, Infosys, Wipro, and HCL Technologies. Most of the growth has come in the past three years, as the company followed an aggressive acquisition-led strategy. Sitting in his plush yet elegant home in Delhi’s tony Friends Colony, and surrounded by several paintings of M.F. Husain, Nayyar, Vice Chairman of Tech Mahindra, says: “There are two aspects (to acquisitions). One is finding the right asset. But, far more important is to make it work. And that is where we differentiate.”

“From a strategic accounts perspective, Nayyar has influenced the company’s big-ticket accounts that needed a dealmaker of his kind, while Gurnani is very international in his approach and very hands-on in technology,” says Sanchit Vir Gogia, CEO and Chief Analyst of Greyhound Research. “Nayyar brings with him a different level of repertoire because of his government and World Bank experience, and his network is very important for the company as well.”

“The LCC acquisition made Tech Mahindra the largest player in network services amongst IT services companies in India,” says Gogia. “LCC not only brought software-defined architecture, but also managed services capabilities.”

There’s another aspect, too. Tech Mahindra’s low margins, according to Gogia, are largely an effect of its focus on infrastructure management and testing, its traditional strengths.

“Its focus on the digital practice has been rather sluggish,” says Gogia of Greyhound research. “They should have been a little more aggressive.” He adds that even as the trajectory for Indian IT companies, going ahead, is expected to be to develop their own software products, Tech Mahindra should invest more time and effort in this regard. The Bombardier solution is a start, but these are few and far between.

Source: Business Today India

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