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Ready for a new normal in a post-pandemic world: Tech Mahindra

IT services provider Tech Mahindra expects to benefit from various industries such as healthcare going digital in a post-pandemic world, the company’s chief executive told ET.

CP Gurnani said the ‘new normal’ would include more businesses going digital – early signs of which are already visible.

“These are best guesses, but I think most of the world would want to start declaring that things are becoming normal in the next 4-6 weeks… the new normal is recognising that we all have to change,” he said.

This would include expansion in health systems, with more out-patient departments going digital and diagnostic solutions moving to department stores.

“I don’t remember the last time I went to a bank – the way banking became digital, I see a lot of businesses becoming digital and hence, the need for 5G becoming much higher,” Gurnani said.

Telecom forms about 40% of Tech Mahindra’s revenue and the company is betting on telecom operators and enterprises going ahead with their 5G implementation plans this year.

While most industry sectors are likely to be impacted in the short term, especially travel and hospitality, Gurnani said telecom clients may not see much change.

“Their requirement to provide services has increased manifold. Most of us are surviving work from home because of telecom companies,” he said.

Once things start to normalise, Gurnani says the pharma industry globally will work towards becoming self-sufficient. Similarly, the mining and minerals sector will start to be substituted as countries work to cut down reliance on others for critical supplies.

Tech Mahindra recorded deal wins worth $3.7 billion in the previous fiscal year, with new signings worth $500 million in the first 45 days of this calendar year, before it was impacted by the Covid-19 related disruptions.

Most clients have cut down on discretionary spends, said Gurnani.

Clients were only looking to keep the ‘lights on’ and want to go online. “It doesn’t matter what you’re selling, everybody wants to go online. So, my digital marketing business is doing very well,” he said.

There have been conversations with customers on reducing pricing, but there is little scope for discounts with its current Ebitda margins, he said.


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