TECHM

** Tech Mahindra, India's No. 5 IT services firm, missed analysts' estimates for fourth-quarter revenue on Thursday

** Stock down 2%, pulling back from from initial decline of 4%

FISCAL 2027 TARGET APPEARS "STEEP"

** Emkay Global ("add"; PT: 1,600 rupees) says TEML's Q4 results were a "mixed bag" as margins showed slight improvement but revenue was a miss, adding that prolonged macro risks pose risk to management's turnaround plans by FY27

** Morgan Stanley ("equal-weight", PT: 1,550 rupees) says TEML's Q4 miss is not "material negative" as most large-cap peers missed Q4 estimates, but co may push FY27 goals due to macro uncertainty and that it requires "flawless execution" to achieve these goals

** Nuvama ("reduce", PT: 1,300 rupees) says TEML "plucked low-hanging fruits" with modest growth in Q4, however, co's FY27 target still appears a "tall ask"

** Brokerage adds, while delivering better-than-industry average growth might appear closer, due to the industry average itself coming down, it will make margin expansion difficult

(Reporting by Kashish Tandon in Bengaluru)

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April 24 (Reuters) - Tech Mahindra Ltd TEML.NS:

• TECH MAHINDRA UNVEILS 'AI DELIVERED RIGHT': A COMPREHENSIVE STRATEGY TO HELP ENTERPRISES SCALE AI WITH PURPOSE AND PRECISION

Source text: ID:nPre7Xbmla

Further company coverage: TEML.NS

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Corrects syntax in paragraph 1

By Haripriya Suresh

BENGALURU, April 4 (Reuters) - India's $283-billion IT sector should brace for a rough year ahead as tariffs are likely to stoke inflation in its key U.S. market and force clients to cut spending, analysts said.

Although President Donald Trump did not impose direct tariffs on IT services, Indian firms are expected to feel the heat as clients, especially in manufacturing, logistics and retail sectors, adjust to the new levies.

That could slow deal cycles, delay existing projects and hurt revenue growth, analysts said. Bernstein and ICICI Securities rushed to cut their ratings on the Indian IT sector soon after the tariff announcement.

The tariffs come at a time the sector was counting on Trump to revive client confidence and discretionary spending after years of weak revenue growth.

The U.S. accounts for more than half of India's $190 billion software exports, making the sector sensitive to shifts in spending confidence among businesses in the world's largest economy. J.P.Morgan on Friday lifted global and U.S. recession odds to 60% after Trump's tariff announcement.

"With a rising risk of U.S. recession and uncertain decision-making, we think chances of fiscal 2026 being a complete washout are rising," J.P. Morgan said in a note on Friday, without giving specific numbers.

At least six analysts expect Indian IT firms to issue a "conservative" annual revenue growth forecast when quarterly results start next week.

Companies with a greater exposure to discretionary spending are expected to bear the brunt of any tariff-fueled slowdown.

"Discretionary IT spend will likely see an impact across the industry verticals. Companies to get impacted will typically be the high-growth companies in the large caps and some of the mid-caps where the exposure usually is much higher on the discretionary side," BNP Paribas analyst Kumar Rakesh said.

He added the impact of a potential slowdown could be apparent by the September quarter.

India's Nifty IT index .NIFTYIT fell 3.6% on Friday to take its losses for the week to 9.15%, the steepest weekly fall for the index in more than five years.

(Reporting by Haripriya Suresh; Editing by Dhanya Skariachan, Sonia Cheema and Saumyadeb Chakrabarty)

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April 3 (Reuters) - ServiceNow Inc NOW.N:

• TECH MAHINDRA AND SERVICENOW PARTNER TO DELIVER NEXT-GEN BROADBAND SOLUTIONS FOR COMMUNICATION SERVICE PROVIDERS

  
  

Source text: ID:nPn2qyRvla

Further company coverage: NOW.N

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** Shares of Tech Mahindra TEML.NS rise 2% to 1,423.45 rupees apiece

** TEML is the top percentage gainer in IT index .NIFTYIT which is up 0.5%

** J.P.Morgan upgrades TEML to "neutral" from "underweight", citing likely margin expansion in an environment of subdued growth

** J.P. Morgan says macro uncertainty in the U.S. will weigh on March quarter earnings in the sector

** Brokerage downgrades HCLTech HCLT.NS to "neutral" from "overweight", citing likely weak March quarter results, soft deal wins

** HCLT shares down 0.7% on the day

** TEML shares are down 18.2% in 2025 so far, HCLT sheds 20% compared to Nifty IT's 16.5% drop

(Reporting by Bharath Rajeswaran in Bengaluru)

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Feb 28 (Reuters) - Tech Mahindra Ltd TEML.NS:

• TECH MAHINDRA LTD - APPROVES MERGER OF COMVIVA USA WITH COMVIVA AMERICAS

Source text: ID:nBSE1PkG54

Further company coverage: TEML.NS

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Feb 18 (Reuters) - Tech Mahindra Ltd TEML.NS:

• APPROVES MERGER OF WHOLLY-OWNED SUBSIDIARIES

Source text: ID:nBSE6dX802

Further company coverage: TEML.NS

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Jan 20 (Reuters) - Wipro's shares WIPR.NS surged about 8% on Monday, set for their best day in nearly four years, after India's No. 4 IT services company joined its peers in signaling a revival in demand.

The company beat third-quarter revenue and profit estimates on Friday and CEO Srinivas Pallia said, "We see discretionary spending slowly coming back" after facing macroeconomic challenges in 2024.

Wipro's shares were also among the top percentage gainers on the benchmark Nifty 50 .NSEI index, which was trading flat. At least eight brokerages raised their rating on Wipro's stock, while 16 raised their price targets, as per LSEG data.

"Wipro is witnessing a pick up in discretionary spends in its BFSI (banking, financial services and insurance) segment - evident from 11% y/y growth in revenue," Jefferies analysts said in a note, raising both their rating and price target.

The BFSI segment accounts for about a third of the company's revenue.

Wipro's bet of a more promising 2025 echoed similar indications from larger peers TCS TCS.NS, Infosys INFY.NS and HCLTech HCLT.NS.

India's $254 billion IT services sector has faced sluggish growth for several quarters due to global macroeconomic uncertainties and inflationary pressures, which have pushed clients to rein in spending.

($1 = 86.4390 Indian rupees)

(Reporting by Manvi Pant in Bengaluru; Editing by Savio D'Souza)

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** IT services provider Tech Mahindra TEML.NS down ~2% to 1,657.6 rupees ahead of Q3 results post the bell

** Analysts expect TEML's consol profit to more than double to 10.46 bln rupees (about $121 mln), rev to grow about 2% to 133.53 bln rupees -LSEG data

** However, BOBCAPS thinks TEML's higher exposure to European markets means global currency volatility hit profitability

** IDBI Capital see moderate sequential growth in rev and core profit margin on better large-deals execution, turnaround plan benefits

** IT index .NIFTIT down 2.7%, as Infosys INFY.NS falls on concerns over Q3 earnings quality

** Market leader TCS TCS.NS has posted tepid performance in key market and HCLTech HCLT.NS missed Q3 rev view

** Morgan Stanley notes slower demand recovery for industry

** Wipro WIPR.NS to report results later today, down 2.2%

($1 = 86.5760 Indian rupees)

(Reporting by Manvi Pant in Bengaluru)

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Dec 20 (Reuters) - Tech Mahindra Ltd TEML.NS:

• TECH MAHINDRA LTD - YABX TECHNOLOGIES ENTERS AGREEMENT WITH SC VENTURES AND FURAHA HOLDINGS

• TECH MAHINDRA - YABX ACQUIRES 1.2 MILLION ORDINARY SHARES, 1.8 MILLION C ORDINARY SHARES OF FURAHA

Source text: ID:nBSE4zqQyT

Further company coverage: TEML.NS

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By Haripriya Suresh

BENGALURU, Dec 20 (Reuters) - India's Tech Mahindra TEML.NS is stepping up focus on its banking, financial services and insurance (BFSI) business in a bid to bridge the gap with larger peers which have historically made more revenue from the lucrative segment, its CEO said in an interview.

Mohit Joshi, who took the helm of India's No.5 software services exporter in December 2023 after more than two decades at Infosys INFY.NS, wants to increase the share of BFSI in Tech Mahindra's revenue mix by up to 25% by March 2027, from about 16% currently.

Some of Tech Mahindra's peers in the $254 billion Indian IT sector already make as much as a third of their revenue from this sector.

"We still have a lot of room to catch up," said Joshi, who started out as a banker with ABN Amro and ANZ before joining Infosys. "I do expect that the relative share of BFSI revenue within TechM will increase, but...organically."

Unlike its peers, Tech Mahindra has relied heavily on telecom clients to boost revenue. That will change as Joshi tries to take advantage of his own expertise and experience dealing with financial services firms to turn the company around.

"BFSI is the single largest spender from a tech services perspective. It's very important for us to play aggressively in this space. Large banks typically spend over $10 billion a year in terms of technology," Joshi said.

Tech Mahindra, which has lagged its peers in both revenue and profit, will focus on core banking, payments, asset and wealth management and custodian services, as well as insurance, he said. Joshi has already shored up its BFSI leadership.

GENERATIVE AI

Generative artificial intelligence is a friend and not a foe for the sector, according to Joshi.

"GenAI is the best spokesperson for why we need more money to be spent on technology," he said, adding it is not the end of the road for software developers.

"I do feel that the overall demand for developers is not going to reduce, because there is a lot more work to be done candidly than there are people just now."

Joshi played down concerns about any potential hit to customer service roles at Tech Mahindra.

"I'm very skeptical about whether we'll see a wholesale replacement of contact centers with GenAI because when it comes to critical issues, people prefer to speak with human beings."

(Reporting by Haripriya Suresh; Editing by Dhanya Skariachan and Varun H K)

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Dec 11 (Reuters) - Tech Mahindra Ltd TEML.NS:

• ANNOUNCES MERGER OF EVENTUS SOLUTIONS GROUP WITH TECH MAHINDRA (AMERICAS)

Source text: ID:nBSE36HJYv

Further company coverage: TEML.NS

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Dec 2 (Reuters) - Tech Mahindra Ltd TEML.NS:

• APPROVES MERGER OF WHOLLY-OWNED SUBSIDIARIES

• PLAN OF MERGER OF TWO SUBSIDIARIES OF ALLYIS INC USA HAS BEEN APPROVED

Source text: ID:nBSE4TbmFB

Further company coverage: TEML.NS

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** Shares of India's Tech Mahindra TEML.NS climb ~3% to 1729 rupees

** IT firm's revenue rose 1.9% YoY, 0.7% sequentially

** Growth of 0.7% QoQ ahead of our estimate (0.3%); believe co on path of recovery with gradual turnaround underway - Antique

** Brokerage maintains "buy" rating; hikes PT to 1,875 rupees from 1,725 rupees

** Q2 results were "encouraging with revenue beat surprising positively," says Jefferies, but maintains "underperform" on rich valuations

** Co rated "hold" on an average - LSEG data

** TEML top pct gainer in Nifty IT index .NIFTYIT, which is flat on the day

** YTD stock has jumped ~36% vs 18% gains in NIFTYIT

(Reporting by Hritam Mukherjee in Bengaluru)

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** IT services firm Tech Mahindra TEML.NS rises 3.3% to 1,629 rupees, making it the top Nifty 50 .NSEI gainer

** CLSA upgrades to "outperform" from "hold", hikes TP to 1,749 rupees, citing likely expansion in profit margin

** Adds focus on BFSI, healthcare, manufacturing indicates more balanced industry mix with reduced telecom reliance

** Says the company's 15% EBIT margin target by FY27 is unambitious due to levers like offshoring, subcontracting

** Overall, analysts' avg rating on TEML is the equivalent of "hold"; median PT is 1,553 rupees -LSEG data

** TEML now up ~28% YTD, top performer on IT index .NIFTYIT which is up ~19%

(Reporting by Yagnoseni Das in Bengaluru)

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Sept 24 (Reuters) - Tech Mahindra Ltd TEML.NS:

• MITSUBISHI UFJ FINANCIAL GROUP SOLD AN INDIRECT INTEREST IN TECH MAHINDRA

• MUFG HAS 2.96% STAKE IN TECH MAHINDRA AS ON SEPTEMBER 19

• MUFG SOLD 2.05% STAKE IN TECH MAHINDRA

Source text for Eikon: ID:nBSE7ZrlHz

Further company coverage: TEML.NS

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** Shares of IT services firm Tech Mahindra Ltd TEML.NS end 1.5% lower at 1,604.65 rupees

** Stock biggest loser on blue-chip Nifty 50 .NSEI index and among IT stocks .NIFTYIT

** CLSA downgrades TEML to "hold" from "outperform", citing near-term stress in telecom, its biggest segment

** Tepid pace of 5G rollout as well as lack of cost saving deal announcements in recent months vs multiple deal wins by rivals among factors for downgrade - CLSA

** Brokerage adds TEML stock's YTD outperformance vs IT stocks and limited upside has resulted in stretched valuations

** Analysts on average rate TEML "hold", in line with most stocks on 10-member Nifty IT index

** TEML stock trims YTD gains to 26.4%, remains second-best performer on IT index

(Reporting by Nandan Mandayam in Bengaluru)

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Recasts throughout, adds CEO and analyst comments

BENGALURU, July 25 (Reuters) - India's Tech Mahindra TEML.NS reported its smallest revenue fall in four quarters on Thursday, helped by its manufacturing and healthcare segments, as the company signalled the return of client spending in its key U.S. market.

Consolidated revenue in the first quarter fell 1.2% to 130.05 billion rupees ($1.55 billion), beating analysts' average estimates of 129.45 billion rupees, as per LSEG data.

Analysts look at revenue numbers as that helps them gauge the demand for IT services.

"With this positive start, we are more confident this will be a better year compared to the previous one," said CEO Mohit Joshi, signalling better spending from U.S.-based clients and a marginal improvement in overall demand.

The company's net new deal bookings rose to $534 million, from $500 million in the previous quarter and $359 million in the year-ago period.

India's $254 billion-worth IT sector has been coping with sluggish demand in recent years, with clients cutting spending on non-essential projects due to economic uncertainty and higher interest rates.

Revenue for Tech Mahindra, India's fifth-largest IT services firm by revenue, began falling in the last three quarters, widening from a 2% fall in the September 2023 quarter to 6.17% in March 2024.

Operating margin rose 170 basis points year-on-year to 8.5% in the June quarter on lower sales and administrative costs. This helped the Pune-based company record a 23% rise in profit.

Larger rivals Tata Consultancy Services TCS.NS, Infosys INFY.NS and HCLTech HCLT.NS also indicated a recovery in North America in the coming quarters after reporting upbeat first-quarter results, noting that "the worst might be over for the sector".

Tech Mahindra shares closed 0.2% higher ahead of the results, while Nifty IT .NIFTYIT index closed 0.15% lower.

($1 = 83.7090 Indian rupees)

(Reporting by Sai Ishwarbharath B; Editing by Janane Venkatraman )

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BENGALURU, July 18 (Reuters) - India's No.2 IT services firm Infosys INFY.NS beat quarterly revenue estimates on Thursday, helped by a recovery in demand from clients in its financial services and manufacturing verticals.

Consolidated revenue in the first quarter rose 3.6% to 393.15 billion rupees ($4.70 billion), beating analysts' average estimate of 389.15 billion rupees, as per LSEG data.

(Reporting by Sai Ishwarbharath B; Editing by Nivedita Bhattacharjee)

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June 25 (Reuters) - Tech Mahindra Ltd TEML.NS:

• PLAN OF MERGER OF UNIT HEALTHNXT INC. WITH ITS PARENT COMPANY TECH MAHINDRA (AMERICAS) HAS BEEN APPROVED

Further company coverage: TEML.NS

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By Sai Ishwarbharath B

BENGALURU, May 22 (Reuters) - Mid-tier firms in India's $254 billion information technology sector took market share from industry goliaths in recent quarters as clients curtailed discretionary spending amid inflationary pressures and economic uncertainty, analysts said.

Unlike their larger rivals such as Tata Consultancy Services TCS.NS and Infosys INFY.NS, mid-tier IT firms tend to focus on short-term deals aimed at helping clients cut costs rather than chase large-scale projects.

The practice has paid off in an environment of slowing demand in prominent markets such as North America and Europe.

LTIMindtree LTIM.NS, Coforge COFO.NS, Mphasis MBFL.NS and Persistent Systems PERS.NS are "increasingly viewed as challengers in (winning) Fortune 500 accounts, aiding the share gain process," Kotak Institutional Equities said.

The smaller companies could outperform their larger rivals further once discretionary spending improves, Kotak analysts Kawaljeet Saluja, Sathishkumar S and Vamshi Krishna said.

This should set the mid-tier IT firms up well as they try to win more budget-conscious clients in an economic backdrop where U.S. interest rates are expected to stay "higher for longer". Industry body Nasscom estimated overall revenue growth more than halved to 3.8% last financial year.

"In the current macro environment, clients are increasingly looking at service providers (that) deliver services at lower and predictable costs with better business outcomes," said Avinash Baliga, partner at consulting firm Avasant.

Persistent Systems CEO Sandeep Kalra and Mphasis CFO Manish Dugar confirmed the market share gains. India's larger IT firms did not respond to Reuters' requests seeking comment.

"We are able to hold our own and win against the larger piers as clients are looking for competency and not scale," Dugar told Reuters.

The market share of India's top five IT firms fell 17 basis points in 2023, reflecting the inroads made by the mid-tier IT firms, according to BNP Paribas data shared exclusively with Reuters. However, the top five IT firms still owned 88.35% of the market as of December 2023 among the top 10 firms.

On the stock market, share prices of Mphasis and Persistent Systems advanced 23.7% and 42.5% respectively in the last 12 months compared to a 16% gain in the broader Nifty IT Index.

In April, Infosys forecast fiscal 2025 revenue growth between 1% and 3% in constant currency terms, while most analysts had expected it to be at least in the range of 2% to 5%.

"Due to the sheer size they have reached, larger players have given muted guidance," said Ashok Soota, founder of mid-tier IT firm Happiest Minds Technologies HAPP.NS , which also gained market share. "We need to be humble about this as (our) market share is (relatively) small on the grand total."

(Reporting by Sai Ishwarbharath B; Editing by Dhanya Skariachan and Shri Navaratnam)

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** Shares of Tech Mahindra TEML.NS up 1.9% to 1,303.35 rupees

** Stock among top pct gainers on benchmark Nifty 50 index .NSEI, which is up 0.3%

** Brokerage Morgan Stanley double-upgrades TEML stock to "overweight" from "underweight", raises PT to 1,490 rupees from 1,190 rupees, CNBC-TV18 reports

** Rating change follows TEML announcing its three-year turnaround plan aimed at increasing revenue and doubling operating margin; however, Q4 rev missed estimates

** Stock hit 8-year high on Friday post results; expansion plan in focus for analysts

** Avg PT among analysts now at 1,260.8 rupees compared to 1,301.21 rupees a month earlier - LSEG data

** Avg rating by analysts is "hold"; stock is fifth-most expensive stock with a fwd 12-mth PE of 25 on the 10-member Nifty IT index .NIFTYIT

(Reporting by Varun Vyas in Bengaluru)

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** Software co Tech Mahindra TEML.NS laid out a three-year plan to increase revenue and double operating margins on Thursday; it reported a Q4 revenue miss

** Stock jumps ~12% to 1,329.15

** At least 2 brokerages hike PT on the stock; 10 slash PTs post results - LSEG data

THREE-YEAR EXPANSION PLAN IN FOCUS

** Jefferies ("underperform", cuts PT to 1,080 rupees) says all eyes on the three-year strategy; sees IT utilisation as key for margin expansion amid missed Q4 results

** CLSA ("Buy", raise PT by 34% to 1,589.86 rupees) says Q4 results largely in line, while FY27 expansion target will deliver in course but growth in margins will be elongated

** Macquarie ("underperform" PT at 930 rupees) sees 36% exposure to communications verticals as a hurdle in achieving FY27 plans

** Emkay Global ("Add", cuts TP to 1,350 rupees) says the new goals will support stock valuations, and will drive re-rating of the stock

(Reporting by Manvi Pant in Bengaluru)

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Bengaluru/April 25 (Reuters) - Tech Mahindra TEML.NS, India's fifth-largest software company, reported fourth-quarter revenue below analysts' estimates on Thursday due to weakness in the communications and media vertical as macro headwinds weighed on overall demand.

Consolidated revenue fell 6.2% year-on-year to 128.71 billion rupees ($1.55 billion) in the March quarter. Analysts, on average, expected revenue of 129.55 billion rupees, as per LSEG data.

($1 = 83.3028 Indian rupees)

(Reporting by Sai Ishwarbharath B; Editing by Janane Venkatraman )

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Adds analyst comments paragraphs 6,8,9; background on new CEO in paragraphs 2,16

By Haripriya Suresh and Sai Ishwarbharath B

BENGALURU, April 6 (Reuters) - Wipro WIPR.NS Chief Executive Officer Thierry Delaporte resigned on Saturday following a fraught few years for India's No. 4 IT services company, to be succeeded by the head of its biggest market.

Srinivas Pallia, a veteran of the company, will take over as CEO and managing director from April 7, Wipro said in a statement, adding Delaporte was leaving to "pursue passions outside the workplace".

The Bengaluru-based software services exporter has had a turbulent few years, with its operating model changing twice in three years, several top-level departures, and some expensive acquisitions that did not translate to growth.

Delaporte, whose five-year term was originally set to end in July 2025, said that he was "proud of the solid foundation" he had helped to lay for Wipro.

Some industry watchers did not share his assessment of his time at the helm.

"He was not spending nearly enough time visiting his teams in India or the U.S. The morale at Wipro was at an all-time low," said HFS Research founder Phil Fersht.

Wipro is likely to be the only one of India's top four IT firms to end the most recent fiscal year with a drop in revenue.

Pallia, who joined Wipro in 1992, was the right choice to succeed Delaporte, said Ray Wang, principal analyst and founder of Constellation Research.

"Pallia is the best bet they have right now and they will have to work hard to bring back (the) good people who have left and develop the next generation of Wipro," he added.

He takes over at a time when the company and the larger $254 billion Indian IT industry grapples with weak client spending amid inflationary pressures and economic uncertainty in key markets such as the United States and Europe.

Wipro has struggled to win large deals, and won its only mega deal under Delaporte in December 2020, with German retailer Metro AG.

TOUGH TASK AHEAD

Pallia's priority should be to retain talent and boost the image and morale of the company, said Pareekh Jain, the founder of IT research firm EIIR Trend.

He should also help Wipro "buck up and win large deals" to catch up with larger rivals such as Tata Consultancy Services TCS.NS and Infosys INFY.NS, Jain added.

Delaporte could not immediately be reached for further comment.

Pallia has been head of Wipro's Americas 1 market, a role in which he oversaw healthcare, consumer goods, life sciences, retail, and other sectors. Based out of New Jersey, he will report to company Chairman Rishad Premji.

Wipro's rivals have also seen changes at the top. Industry leader Tata Consultancy Services promoted insider K Krithivasan to CEO last year after Rajesh Gopinathan quit abruptly, while Infosys veteran Mohit Joshi took over as Tech Mahindra TEML.NS CEO in December 2023.

LTIMindtree LTIM.NS has identified two internal candidates for its top job, as it is unlikely to extend CEO Debashis Chatterjee's term that is set to end next year, sources told Reuters earlier this year.

(Reporting by Haripriya Suresh and Sai Ishwarbharath B; Editing by Mark Potter, Dhanya Skariachan and Ros Russell)

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March 6 (Reuters) - Tech Mahindra Ltd TEML.NS:

• GETS INCOME TAX ORDER FOR PENALTY OF 57.5 MILLION RUPEES

• INCOME TAX PENALTY OF 187.3 MILLION RUPEES

Source text for Eikon: ID:nBSE45Dz6C

Further company coverage: TEML.NS

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By Sai Ishwarbharath B

MUMBAI, Feb 27 (Reuters) - Global companies are setting up more offices in India and expanding in-house teams but that does not mean the end of the road for Indian IT firms, which rely heavily on outsourcing deals, executives said at a Nasscom event last week.

Companies opened 118 global capability centers (GCCs) in India over the past two years in a boost to 'insourcing' efforts, taking their total count to over 1,620, February data from the industry body showed.

IT firms are helping GCCs scale up, innovate and do much more, said Ananth Chandramouli, the India managing director of French IT firm Capgemini CAPP.PA.

"We are also helping their platforms and solutions to go to market. Now GCCs are (being) made a revenue center from a cost center, and it is net new revenue for both of us. It will not cannibalize our revenues," he said.

Other industry insiders agreed.

Satish HC, executive vice president and co-head of delivery at India's No.2 software services exporter Infosys INFY.NS, said its strategy was to work with GCCs, no matter which route they took to drive innovation.

"If somebody wants to scale up their captive (offshore unit), we will co-exist and work with them. If somebody wants to create a captive and ask us for a BOT (build-operate-transfer) deal, we will be glad to do a BOT deal," he said, adding that it was important to "be collaborative and not be prescriptive".

The comments come as some industry watchers are cautioning that India's rise as a GCC powerhouse could dent the revenue of IT firms, which have made a fortune by helping address overseas clients' tech needs.

"Overall revenue growth can be impacted for companies with high exposure to heavily insourcing clients," Kotak Institutional Equities said in a December note, referring to the banking, financial services and insurance sectors in particular.

"While insourcing has been on the rise, it has not reached alarming levels yet."

Attendees at the Nasscom event sang a different tune, saying that the two models could co-exist.

"MNCs are not taking outsourced spend and rechanneling it to GCCs, most of the GCC ramp-up is driven by migration of existing insourced spend," said Anuj Kadyan, senior partner at consulting firm McKinsey.

Some said the pie was big enough for everyone.

"There is enough tech spends to be shared between GCCs and traditional IT players. The usual ratio is 60% is insourced and 40% with outsourced partners," said SAP Labs India Managing Director Sindhu Gangadharan. "We don't see any changes in that."

(Reporting by Sai Ishwarbharath B; Additional reporting by Haripriya Suresh; Editing by Dhanya Skariachan and Varun H K)

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Feb 20 (Reuters) - Tech Mahindra Ltd TEML.NS:

• ACQUISITION OF 100% STAKE IN ORCHID CYBERTECH SERVICES INC

• COST OF ACQUISITION IS AUD 5 MILLION

Further company coverage: TEML.NS

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Feb 16 (Reuters) - India's technology sector is expected to grow at a slower pace this fiscal year as clients hold back spending and delay decision-making, its main industry body said on Friday.

The National Association of Software and Service Companies (Nasscom) expects the industry's revenue to grow 3.8% to $253.9 billion, compared with the previous fiscal year's 8.4%.

The expansion this year will likely be driven by lower- to mid-single-digit contributions from all segments, including information technology, business process management, software products, engineering research and development, Nasscom said.

Software exports, comprising services and sale of products to clients, fell 3.3% to $199 billion as opposed to a 11.4% growth in the previous year.

The sector is expected to add 60,000 jobs on a net basis, a nearly 80% drop from the previous year's addition of 290,000 jobs.

However, the industry's total headcount increased to 5.43 million from 5.37 million a year earlier.

The industry body did not disclose the geographical or industry-specific distribution of the revenue.

The current fiscal was marked by a lot of uncertainties and slow decision-making, Sangeetha Gupta, senior vice president at Nasscom, said. "So if a project that should (have) got started in a quarter got pushed down by six months, you're seeing that impact on revenue growth," Gupta said, adding that there was a "correction in spending" after COVID-related boom.

The pandemic pushed clients to enhance their digital investments, especially in sectors such as retail, banking and financial services amid curbs on movement.

However, the surge in investments started fading since the beginning of this fiscal year due to global macroeconomic uncertainties.

There is some "reversal" of sentiments in 2024 as US recession fears are weakening, Nasscom President Debjani Ghosh said.

(Reporting by Sai Ishwarbharath B; Editing by Dhanya Ann Thoppil)

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Adds details throughout

Shares of India's Tech Mahindra TEML.NS fell as much as 6.3% to post their worst day in more than three years on Thursday after the company's third-quarter profit missed estimates.

The country's fifth-largest IT services company on Wednesday reported a 60.6% slump in profit to 5.10 billion rupees ($61.4 million) for the three months ended Dec. 31, missing analysts' estimate of 6.17 billion rupees, according to LSEG data.

The Pune-based company's operating margins contracted 660 basis points (bps) to 5.4%, the lowest among the top five Indian IT services companies. Meanwhile, new deal wins more than halved to $381 million.

This is the fourth straight quarter that the company has reported a double-digit dip in profit.

With the company undergoing restructuring under the CEO Mohit Joshi, analysts, while optimistic about the transition, see slippages in growth and expect the stock to underperform its peers.

The stock was down 5.7% at 1,327.15 rupees as of 12:20 p.m. IST and was the biggest loser in the Nifty IT index .NIFTYIT, which is down 1.6%.

Jefferies, while raising its revenue estimate for Tech Mahindra by 1% over fiscal 2024-2026 has cut down its margin estimates by 100-180 bps over the same period to factor in the third-quarter profit miss.

Analysts at Motilal Oswal expect the company's growth to be pressured in fiscal 2025 due to weak deal wins and low profitability, but see opportunities in the communications segement - its biggest - on the back of the broader 5G rollout.

($1 = 83.1200 Indian rupees)

(Reporting by Ashish Chandra in Bengaluru; Editing by Dhanya Ann Thoppil and Sonia Cheema)

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