Demand environment has definitely improved from 2012: CP Gurnani, Tech Mahindra

In an interview with ET Now, CP Gurnani, CEO, Tech Mahindra, shares his business outlook. Excerpts:

ET Now: Six months into the new fiscal, what is the business outlook like?

CP Gurnani: For the combined company - Tech Mahindra and Mahindra Satyam - 48% of the business comes from telecom, which is still investing in digital enterprise - 3G and 4G. Rest of the enterprise business is also showing reasonably high demand, particularly for Tech Mahindra.

Apart from the Satyam part, we did not participate in many large deals. However, I see things have improved for us. There is still a long way to go, but in general, I would say, the demand scenario is a lot better than what it was in 2012.

ET Now: How have the Comviva and Complex IT businesses performed? What is your outlook on the telecom vertical?

CP Gurnani: All the acquisitions have worked very well. If you recall, we had acquired a company called vCustomer, which is doing extremely well.
Comviva has a range of products, like the value added services for teleco customers globally and products for mobile payment systems. Both the markets are showing a reasonable promise and I am very pleased with the Comviva acquisition.

Complex IT was an acquisition that we did to increase our reach in the Brazil market. We are already implementing a solution in Brazil for the FIFA 2014 World Cup and Complex IT is a big part of my implementation of FIFA. We strongly believe that the domestic demand in Brazil is going to be robust and we are positioning ourselves to be a local company in Brazil with global delivery centres and models.

ET Now: Does the NASSCOM growth projection for this fiscal seem achievable? Are you on track to meet the $5 billion targeted by your company by 2015?

CP Gurnani: The growth projections were realistic and were taken into account after having an extensive dialogue with consultants like McKinsey. After having interviews with the user community and the governments, it also took into account the opinion of many of the NASSCOM members.

My belief is that it is a realistic projection and the good companies can exceed it. Most of the companies will remain within that bandwidth and it may not be because of rupee volatility, but because there has been, in general, a reasonable demand outlook.

ET Now: Is the inorganic growth route something that Tech Mahindra will look at in a big way, now that Satyam integration is out of the way?

CP Gurnani: Tech Mahindra has always stated its strategy to grow on four planks. Number one, on a business momentum, enterprise business solutions and engineering services; number two, through processes or service; number three, by investing in products and innovation; and number four, through mergers and acquisitions. Yes, we are in the market for inorganic growth and as and when we get good candidates and good opportunities, we will make an effort.