Just after Tech Mahindra announced the appointment of Mohit Joshi as its new Managing Director and the CEO, the total shares of the ICT company reached nearly 10% to ₹1,164 apiece on Monday’s trading session, according to BSE.
Joshi is to take over from CP Gurnai, who will retire from Tech Mahindra on 19th December, 2023, although Joshi will be allowed to join the big table of Tech Mahindra before 19th December to give him enough time to familiarise.
Joshi, the tech veteran who has spent almost 22 years at Infosys had announced his resignation from the IT company with effect from 11th March, 2023.
Speaking right on the appointment of Joshi, brokerage Nuvama noted that “The appointment of Mr Mohit Joshi clearly signals a change in strategy for TechM given his non-telecom background. That said, we believe the new CEO would need to do lot of work to turn around TechM’s operations. Accordingly, in the meantime, TechM might underperform peers. We expect the stock to underperform (relatively) over near to medium term. TechM’s inexpensive valuation and high dividend yield limit the downside potential though.”
Meanwhile, analysts have conceded that the appointment of Mohit Joshi as the new CEO of Tech Mahindra may bring some challenges to the company and Joshi, especially with the expectations mounted on the Joshi to consistently revive Tech Mahindra’s growth rate, increasing the revenue base as well as moving the ICT company’s standards of services to match that of other competitors.
ICICI Securities also added in a note that the “market may react positively in anticipation of new strategy roll-out by the new CEO to revive the performance of Tech Mahindra. However, we do not believe that the leadership change can materially change the earnings fundamentals of the company in the medium term (2-3 years) and reviving growth fundamentals is likely to be a gradual process.”