CFO Tech Mahindra Rohit Anand shared his views on the global recession and how to deal with the uncertain macro environment. The financial leader believes that the recession is likely to be a temporary phenomenon and may not have long-term implications for the IT outsourcing industry. Below are edited excerpts.
How do you rate the global recession?
Rohit Anand: The global macroeconomic situation looks a little tougher compared to a quarter ago. In Europe, if you can see, the war continues and because of that the issue of energy has intensified. Factory closures are a possible risk in the next few months. Thus, the recession has a different impact on Europe than in the US, where inflation is more broadly based and does not depend on rising energy prices. Also, the unemployment rate in the US is the lowest. Therefore, we are still several quarters away from possible serious economic implications than, say, Europe and Great Britain.
Q: How is Tech M handling the recession?
Rohit Anand: We are watching things closely in terms of how our customers react as the situation develops for the US, UK and Europe. For now, our pipeline remains strong and the momentum of job conversion looks positive. Also, Tech Mahindra looks at scenario planning and makes sure that enough effort is put in to deal with it if that possible harsh environment scenario arises. But even if a severe phase occurs, its impact will be more temporary. Structurally, businesses want more outsourcing to happen, and that’s where we come in and add value to them.
Q: What would you focus on most as the global recession intensifies?
Rohit Anand: Focus will continue to be the driver of the near-term operating matrix as was the case in Q2. It will be on margins, prices and internal measures of productivity. This time it will continue as it is. Also, structurally, the plan is to provide a business combination that is more favorable to the US market, which helps us from a margin point of view. Another priority will also be to continue looking at lines with higher added value and increasing margins in digital business (Digital business contributes 50% revenue share to Tech M). Also, the focus will be on further divesting businesses that are not strategic and do not add value to margins.
Q: What is your New Year 2023 resolution on a personal level?
Rohit Anand: I am very much into health, so I will continue to do that. I look forward to being healthier. I do not take any oils, dairy, dairy and non-vegetarian, etc, and eat more raw and fresh food. I haven’t spent enough time in the kitchen because of work, but I would like to spend more time in the kitchen, and make my own food as much as possible.