New delivery structure may aid growth prospects at Tech Mahindra

Bengaluru, 30 October New delivery structure at Tech Mahindra is likely to bring in more accountability, customer centricity, and help the company to win more large deals in the medium term.

According to brokerage firms, the new delivery structure announced by the new CEO designate, Mohit Joshi is expected to be operational from January 1, 2024.

As per the new organisational structure, Tech Mahinra will have six strategic go-to-market business units.

“It has divided Americas into three broad industry verticals – communication headed by Abhishek Shankar, tech and media led by Harshul Asnani, diverse industry group led by Lakshmanan Chidambaram, EMEA business unit led by Vikram Nair, Asia-Pacificand Japan headed by Harshvendra Soin and India business unit. In EMEA and Asia-Pacific & Japan, the company has consolidated telecom and non-telecom businesses. Delivery will be vertical focused and the company has total eight service lines. New delivery structure is likely to bring more accountability, customer centricity, focus on top accounts and large deals,” ICICI Securities wrote in a report.

Tech Mahindra posted subdued performance in the second quarter ended September, 2023. It reported revenue of Rs 12,869 crore, down2.2 per cent on a quarter-on-quarter basis. The company’s operating margins, too, stood below expectations, declining by 210basis points.

“From a long-term perspective, Tech Mahindra is sorting out the client-specific engagement issues on the verticals front and the deal pipeline remains sturdy,” Axis Securities wrote in a note. It, however, added that rising concerns over the prospects of large economies along with prevailingsupply-side constraints pose uncertainties over the company’s short-term growth rates.

In the second quarter, most large cap and mid-tier firms have reported tepid revenue growth with management commentary that indicated a tough second half ahead. Most experts are pinning their hopes for recovery prospects in the next financial year.