It’s the end of an era for Tech Mahindra. After months of speculation of ‘will-he-won’t-he’, Managing Director and CEO CP Gurnani’s tenure has come to an end. Gurnani was appointed CEO twelve years ago, in June 2009. While there was a lot of buzz around whether India’s sixth largest IT company by market value would go with an internal pick, they eventually appointed former Infosys President, Mohit Joshi. The market was evidently pleased. In the three days that have passed since the announcement, Tech Mahindra’s shares jumped by the biggest margin (9.7%) in three years.
Joshi’s last day at Infosys will be on June 9, 2023, well in advance of Gurnani’s day of retirement on December 19, thus giving Joshi a comfortable transitory period.
Background and Career
Joshi’s exit comes as a shock after more than two decades spent at the Salil Parekh-led company. Joshi started out as a Senior Business Development Manager in the company, post which he gradually grew. Joshi’s final stint within Infosys lasted seven years prior to which he was Executive Vice President at the Global Financial Services segment. Even way back in 2007, Joshi was made CEO of Infosys Mexico and helped set up the IT giant’s first subsidiary in Latin America.
Joshi’s educational background and work experience before Infosys was in a decidedly different direction. A Delhi native, he obtained a bachelors’ degree in History from St. Stephen’s College followed by an MBA from the Faculty of Management Studies, University of Delhi. Joshi was also part of the Global Leadership and Public Policy for the 21st Century program at the Harvard Kennedy School.
He spent the initial days of his career in the banking sector as a part of the corporate and investment banking teams at ABN AMRO and ANZ Grindlays. In 2014, he was invited to join the World Economic Forum for their Global Young Leader program.
Joshi’s name popped up in the list of potential contenders in 2017 following the sudden resignation of the then Infosys CEO, Vishal Sikka. However, the job eventually went to industry veteran and former Capgemini executive, Salil Parekh.
Co-incidentally, another name that was in the shortlist of hopeful chiefs, Ravi Kumar S, also resigned as President from Infosys in October last year. Kumar went on to join Cognizant as a President of their Americas business starting from January.
Expectations from appointment
Investor optimism around Joshi’s appointment is reasonable. In their third-quarter earnings released in January-end this year, Tech Mahindra reported a net profit of INR 1,296.6 crore, 5% lower than their profit posted a year ago for the same quarter. The company had shown INR 1,368.5 crore in net profit for the last year.
A big chunk of Tech Mahindra’s money comes from their telecom clients. A couple of weeks back, a senior executive from the company stated that they expect to touch a USD 7 billion revenue run rate for the current fiscal year, of which the telecom segment is expected to contribute USD 3 billion.
Under Gurnani, Tech Mahindra has been busy in the mergers and acquisitions (M&A) area. Even as early as March this year, Gurnani announced that the company will invest up to INR 700 crore in its new products and platforms division for the next two years.
At Davos 2023 held in January, Gurnani reiterated that acquisitions were central to Tech Mahindra’s strategy but the company would now shift their focus to organic growth. ‘For the time being, we are going to consolidate and create value with the acquisition that we have already done. My focus is organic growth. The leadership team will obviously be opportunistic, but there’s nothing that I can say that we are looking at,’ he explained.
Tech Mahindra may be performing reasonably well given the current macroeconomic climate but it is still lagging behind other IT companies. Experts say that if Tech Mahindra turned its eyes on improving its digital capabilities, the company’s topline estimates would grow considerably. In an interview with ET, investment advisor Sandip Sabharwal said that Joshi’s appointment would help Tech Mahindra’s case considerably. ‘It is not that Tech Mahindra has been doing badly. It is just that it can grow faster,’ he explained.
Investors are anticipating that Joshi will bring his mix of expertise in the BFSI sector along with a knowledge of AI. During his tenure in Infosys, Joshi was found in the deep-end of this sector and conducted interviews around the pitfalls and scope of AI with prominent tech and industry experts. But it helps that Joshi’s attitude towards AI advancements had a healthy skepticism.
In November last year, Joshi tweeted a story based on AI biases integrated in HR services. “Technology can help us to overcome many challenges in the recruitment process—however, it cannot solve every problem,” he stated.
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