There is a lot of fear over the impact of Britain exiting the European Union across businesses and financial markets. However, India’s software firms are not so much concerned over the fallout of Brexit. Speaking to Bloomberg TV India, Tech Mahindra CEO and Managing Director CP Gurnani says Brexit will have a limited impact. Keeping its options open for more mergers and acquisitions, he said Tech Mahindra will focus on digital technologies, platforms and software-as-a-service.
Global financial markets and even global conglomerates are worried over Brexit. What’s your perception for software companies like Tech Mahindra? Will companies have to change their corporate strategies if Brexit really happens?
I look at it differently. We are in consulting and project implementation. Businesses normally take these decisions into stride. And if at all they have to rethink their decisions, they always work. A boardroom in London or Frankfurt or Amsterdam has to be taken into account and has to take some kind of a pro-active call whether the UK will be a part of the EU or not. And they have taken the decision. So, it is not impacting any of the IT business or any of the engineering businesses in near future.
I do not even know what is the worst. The reality is that the US market has been going up. The reality is the Europe is still buying. The fact is that commodity prices have started becoming better. And has it translated into oil and gas sector immediately saying — if it (crude oil price) is $48 or $50 a barrel, I should start buying more? No. They are still trying to find the equilibrium price. They are also trying to find what is the right and sustainable budgets. But, I am seeing a lot of interest coming in from Middle East, particularly Saudi Arabia, because I think operating efficiency and productivity is becoming a fairly important subject for them. I think it looks promising. While there are geopolitical challenges, there are commodity pricing challenges at times and foreign exchange challenges at times. Overall, the business climate looks optimistic.
Mergers and acquisitions are a very important part of your strategy. We have seen a slew of that activity in the IT space as well. Going forward, how is your M&A strategy looking like? What are the geographies or verticals that will be in focus for you?
For Tech Mahindra, it is a stated fact that M&A is a critical part of our strategy. Both our shareholders and the Board of Directors have encouraged us to look at mergers and acquisitions as long as it is a technology strategic fit, a market strategy fit and it helps in adding to our service offerings. Our focus clearly is towards digital technologies. Our focus is towards product-as-a-services and software-as-a-service. And we will continue to expand both organically and inorganically.