Earlier in Feb, you had announced entry into Metaverse. What’s your roadmap and how is the response you have got so far?
At Tech Mahindra, we have created a comprehensive service suite of Metaverse offerings (TechMVerse) that we plan to take to our customers across industries. We further intend to:
- Create a multitude of industry and use-case specific tailored environments
- Combine our design leadership with strengths in blockchain, AI, 5G, and quantum computing to create truly immersive experiences
- Offer advanced use cases such as gene sequencing, factories-of-the-future, and drug discovery among others that truly showcase the innovation and potential of metaverse in complex industrial use cases
- Setup a Silicon Valley Metaverse Immersion Studio for customers to integrate their products with the ecosystem and test interoperability of their metaverses and environments
Which segments of the business do you think would be the key growth drivers for you in the next few quarters?
In the enterprise domain, technology and BFSI have been the major growth drivers for the current quarter. For us, the key focus for the upcoming quarter would be on telecom, 5G, and communication. We continue to see strong market demand for new-age technologies and we will continue innovating in the Data Processing Systems (DPS) & Business Process Systems (BPS) segments to further capitalize on this opportunity.
How big is the opportunity that you see in the 5G market?
We believe that with industries moving towards complete digitalization, 5G will evolve as the game-changer technology. The rollout of 5G globally will unlock more innovations, generate new growth avenues, boost industrial productivity, and much more. At Tech Mahindra, 5G continues to be an important and dominant part of our portfolio and growth agenda, both in terms of deal wins and engagements. We have been consistent about this for a few years and our investments in the 5G ecosystem, on the network, and within the telecom service provider infrastructure and systems, have continued to reap good benefits for us. As we go forward, we will remain more invested in this tailwind. Our expertise is in areas of software-defined networks, particularly radio networks and we want to play a dominant role in the software-defined network space, whether as a system integrator or a managed network service provider.
At Tech Mahindra, our strategy is clear: provide digital connectivity with 5G to make organizations efficient.
You had recently said that the management team’s focus would be on organic growth. Can you help us understand the rationale behind the decision?
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Yes, from a capital allocation standpoint, this year we will focus more on organic growth. We will emphasize on consolidating the assets that we acquired last year. We believe that a significant amount of work is required to ensure that we do it right by establishing a comprehensive framework and ensuring that we assimilate all of these acquisitions into the company from a cultural and go-to-market perspective so that we can reap the long-term benefits of synergy that we have planned for those assets. The focus will be on making them more organic and aligning them with our general architecture so that we can reap the maximum benefit out of it.
Do you think wage inflation and attrition could be the biggest challenge for FY23?
Inflation and attrition are industry-wide challenges. However, at Tech Mahindra, we were able to stabilize our quarterly annualized attrition, which has fallen to 19.3% from 23%. In order to stem attrition, we have undertaken several initiatives which include increments, a special bonus for all associates, a war chest to use as and when required for retaining people & upskilling them and redeploying in projects so that they can benefit financially. Additionally, we are hiring talent from new areas, setting up physical centres in tier-2 and tier-3 cities to diversify talent and are also leveraging gig workforce – as talent can be found anywhere. New positions are filled based on ‘best-fit’ talent to deliver outcomes without any location constraints. This has helped us create a robust talent pipeline and increased diversity among the workforce as well. We are undertaking numerous steps to modify existing strategies & cull out new ones and are putting efforts into progressive concepts like ring-fencing, recognition through awards, and offering opportunities to provide our employees with adequate room for growth.
What are your hiring plans for the new financial year?
We will continue to focus on skill-based hiring, especially in emerging technologies. Currently, we are looking at hiring across digital technologies including Artificial Intelligence, Cloud, Robotic Process Automation, Blockchain, 5G, Internet of Things, and Cyber Security, among others. For this, we are focusing on cross-skilling, upskilling, and hiring from the existing talent pool in the industry and are looking for fresh talent in Tier-2 cities. Overall, the global delivery centre model is working very well for us. We have people working across 90 countries.
Do you think rising inflation and interest rates can also affect spending by your clients?
Our pipeline seems to be robust. We continue to see client demands in the field of IT and BPS. We will continue to monitor the situation and interact with our clients regularly to be updated if there are any changes required here.
Your new deals jumped nearly 50% to $3.3 billion last year. What does the deal pipeline look like for FY23?
We had another quarter of strong deal wins with TCV exceeding $1 billion for the second time in the last two years. This resulted in an overall increase of about 50%-plus over the previous year in terms of TCV win. Our deal win momentum is similar; we ended the year last year with a similar deal win and that’s the same position we’re in. Going forward, we see a strong deal pipeline and believe there are ample opportunities for us in the market.