Target: ₹1,270
CMP: ₹1,133.60
Tech Mahindra (TechM) has appointed Mohit Joshi as MD & CEO designate.
TechM remains strong in communications, but lacks scale in BFSI and other verticals compared with large peers. Joshi would bring in a vast and competent experience as well as fresh energy, ideas and perspectives to TechM which would be a vital appendix to its traditional strength in communications. He has an impeccable track record of scaling business as a strategic thinker and as a strong delivery leader.
TechM, in its recent Analyst Meet, indicated that growth strategies are unlikely to materially modify with a leadership change, as these are driven by customer input. Mohit Joshi’s experience in digital transformation, new technologies and large deals will complement TechM’s strategies and continue to build on business-mix diversification.
During a recent M&M analyst meet, Anish Shah (MD & CEO - M&M) mentioned that Management is not happy with TechM’s current margin & RoE profile of TechM and indicated that the Board will ensure smooth leadership transition and drive overall turnaround in performance, particularly an improvement in margin and RoE, over the next 1-2 years.
We believe Joshi’s selection gives more credence to the company’s overall turnaround efforts and the stock may potentially see a re-rating.