After the news that Mohit Joshi has been appointed to the roles of Managing Director and Chief Executive Officer (CEO) of Tech Mahindra, the price of Tech Mahindra shares on the BSE increased by 9%, reaching a high of Rs 1,159.95 throughout the course of the trading day on Monday.
Once CP Gurnani steps down from his position as CEO and MD on December 19, 2023, Mohit will succeed him in those roles. The press announcement does not provide information on when Mohit will begin working for the company. On June 9, 2023, he would no longer work for Infosys before leaving the company.
According to a filing with the exchange, Tech Mahindra said, “Appointment of Mr. Mohit Joshi, for a term of five (five) years, with effect from the 20th of December, 2023, to the 19th of December, 2028 (both days inclusive).”
Mohit Joshi, who most recently held the position of President at Infosys, has decided to join the organization. Mohit has more than two decades of experience working in the enterprise technology software and consulting arenas. He has worked with some of the top firms in the world, assisting them in driving digital transformation and developing flourishing businesses.
Tech Mahindra said that Mohit was the head of the global financial services and healthcare businesses as well as the software companies at Infosys. These businesses include Finacle, which is a banking platform, and the AI/automation portfolio.
ICICI Securities says that Mohit Joshi will start working early so that the change will go smoothly.This would be in accordance with the statements that Gurnani made at the most recent analyst session that was conducted.
The following is a possibility: The brokerage company added in its report that the medium-term advantages of Mohit joining Tech Mahindra’s BFSI vertical ($1 billion annual revenue, 16 percent mix) have seen some sequential fall in the previous five quarters, but it may likely see some stop there.
Tech Mahindra is looking at accelerated growth in their Healthcare & Life Sciences vertical (currently at just over $600 million in annual revenue and clubbed in the ‘others’ vertical in disclosures), as they are targeting this vertical to reach $1 billion in revenue in the next two to three years, and Mohit’s expertise there could help achieve the same. It was further stated that Tech Mahindra is targeting this vertical to reach $1 billion in revenue in the next two to three years.
His experience in the platform business should help the company’s decision to put a big bet on the platform business, which brings in 450 million dollars a year and is expected to bring in a billion dollars over the next three years.According to a note released by ICICI Securities, “We believe there is scope for TechM’s current valuation discount of 40–50 percent to Infy/TCS to narrow in the future. However, we believe that will only happen in a gradual manner (as in when acceleration is visible in their numbers), and we do not see that as an immediate possibility.”
Motilal Oswal Financial Services (MOFSL) thinks this is good news for Tech Mahindra because it will help the company catch up with its competitors in the BFSI sector and grow on a larger scale.In addition, Mohit has a solid reputation in the business world and is able to lend a hand in revitalising the company’s go-to-market strategy, which has fallen behind that of the company’s competitors.
On the other hand, we will keep a close eye on any leadership turnover at the firm since this might have a negative effect on the company’s operations in the short run. In addition, we anticipate that both growth and margins will continue to be under pressure at Tech Mahindra in the near future. Clarity on a turnaround is what we would look for. MOFSL said in its sector report that they are maintaining their neutral rating on the stock.
In spite of today’s gains, Tech Mahindra has underperformed the market over the previous year, seeing a decline of 22%, whereas the S&P BSE Sensex has had a rise of 7%. This underperformance comes despite today’s gains.
