IT major Tech Mahindra is actively scouting for acquisition both in the BPO as well as technology space even as it battles dwindling revenues from its largest customer and joint venture partner, British Telecom.

The IT service provider, which specialises in the telecom sector, has also given out huge salary hikes last month which ranges between 12 per cent and 22 per cent for most of its 28,000 employees.

Tech Mahindra's President for IT services, Mr L Ravichandran told Business Line that the company plans to acquire a BPO for supporting overseas customers. In the IT services space, it will look at specialised niche technology companies for acquisition. “We have a M&A group which is actively looking into it. Our ability to fund acquisition is not an issue,” he said.

Mr Ravichandran said the company is also scouting for partner companies for making a foray into emerging Russia as a go to market strategy and for most of its overseas operations it will focus on hiring local talent. Tech Mahindra's IT services has about 28,000 employees and another 10,000 work for its BPO operations.

As part of the derisking strategy, the company has reduced its dependence on British Telecom with the revenues from that business coming down to about 39 per cent from 90 per cent over the last six years.

He pointed out that British Telecom has put some of the business given to Tech Mahindra as well to the others for tender and everyone has to bid for bagging the contract. “We are a little bit favourites because we are the incumbents but we have to think how we can do things better and give more savings,” he said. Tech Mahindra's revenue from BT is about $400 million and from non-BT it is about $ 650 million. British Telecom has about 23– 24 per cent stake in the company and is still its largest customer.

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