While TCS is directly getting business from Tata Group companies including Jaguar Land Rover and Tejas Networks by handling their IT infrastructure, Tech Mahindra is relying on Mahindra Group companies for real estate, finance, and energy synergies in order to set-up back-end tech centres for clients.
TCS and Tech Mahindra are the only two of the country’s Big Five IT services companies that are part of large conglomerates. (Infosys Ltd, HCL Technologies Ltd, and Wipro Ltd make for the other members of the Big Five.)
Tech Mahindra offers “an integrated value proposition to global enterprises” as they expand their so-called global capability centres, or GCCs, in India, Mohit Joshi, chief executive of Tech Mahindra, said on the company’s post-earnings analyst call on 14 October.
GCCs are captive tech service hubs that manage everything from hiring and compliance to infrastructure and day-to-day operations.
Varied strengths = Synergy
The Mahindra ecosystem is critical in driving revenue for Tech Mahindra, Joshi added. Its technology expertise and digital capabilities “are complemented by broader strengths within the Mahindra ecosystem from world class infrastructure through Mahindra Lifespaces and Origins to renewable energy solutions from Mahindra Susten and financial and advisory support via Mahindra Finance,” he said.
The cars-to-construction Mahindra Group, with a market cap more than $44 billion, operates Tech Mahindra, M&M Financial Services, and Mahindra Lifespaces and Origins besides the flagship Mahindra & Mahindra, a maker of SUVs and tractors. The group is headed by Anish Shah, who took over its reign in 2021.
Joshi went on to add that group companies help in building end-to-end relationships with global clients looking to set up GCCs in India.
The varied abilities among group companies help Tech Mahindra “establish and scale their GCC operations in India with speed, reliability and sustainability” allowing it to differentiate itself in the IT services market, said Joshi.
Tech Mahindra does not call out revenue from GCCs or the number of such partnerships.
A second executive, who did not want to be identified, delved deeper into Tech Mahindra’s partnerships with Mahindra Group companies.
Single contractor
Group synergies help the country’s fifth-largest IT services company become a one-stop solution for client needs. “If we do not utilise these group companies, our clients will have to look out for different companies for land, legal requirements, tech skills, and it becomes cumbersome. When Tech Mahindra offers multiple solutions, it will become a single window shop,” said the executive.
This move puts Tech Mahindra in direct competition with the likes of ANSR, which looks at the end-to-end journey of a GCC in the country, from getting land to set-up shop, to hiring the right talent.
“IT services firms that have broader conglomerates behind them are at an advantage,” said Ashutosh Sharma, vice-president, research director at Forrester Research.
“The only problem they face is that the conglomerate’s sister companies are not bound to work with them. IT services companies have to compete with other firms but having cross domain relationships amongst employees in sister firms always helps,” said Sharma.
According to industry body Nasscom, India has more than 1,760 GCCs, of which 875 are in Bengaluru and 355 in Hyderabad. Its data suggest that GCCs generate export revenue of at least $64.6 billion of the IT sector’s total of $283 billion. Nasscom estimates India will have 2,200 GCCs by March 2030 with the market valued at around $105 billion.
A sector expert termed the backing of conglomerates a definite advantage for Tech Mahindra and TCS.
“The only problem they face is that the conglomerate’s sister companies are not bound to work with them,” said Ashutosh Sharma, vice-president, research director at Forrester Research. “IT services companies have to compete with other firms but having cross domain relationships amongst employees in sister firms always helps.”
TCS momentum
While Tech Mahindra is leveraging group company strengths, its no. 1 rival in IT services TCS is bidding directly for and winning contracts from group peers.
According to a Mint report on 30 May, at least three Tata Group firms fetched TCS a cumulative $1 billion in revenue last fiscal, up more than three times since 2017. This made up about 3% of its total revenue.
In 2023, TCS won an GBP800 million order from Tata Motors’s UK subsidiary Jaguar Land Rover to modernise its IT infrastructure. It is also working with Tata Technologies to modernise the latter’s core backend software.
In the same year, TCS also won a ₹15,000 crore contract from state-run Bharat Sanchar Nigam Ltd. For this, TCS partnered with Tejas Networks, a group company that makes wireless networking products for telecom companies. Lastly, TCS also bagged multi-year contracts worth over ₹5,000 crore from its non-bank lender Tata Capital Ltd.
However, the bid to make use of the conglomerate’s other companies is not new. As back as six years ago, Natarajan Chandrasekaran, chairman of group holding company Tata Sons, had flagged the ‘One Tata’ strategy which he described as “embarking on a process of simplifying, synergizing and scaling (3S) to create an agile, powerful platform”.
Tata Sons owns shares in about 26 Tata companies, including TCS, Tata Motors Ltd, and Tata Steel Ltd, among others. Cumulatively, Tata Sons has over $328 billion in market capitalization as of March 2025 and TCS is its crown jewel, accounting for about 84% of its net income.
Chandrasekaran began his career with TCS and rose through the ranks to become its chief executive officer in 2009, before he was elevated as Tata Sons chairman in February 2017.
Since then, Chandrasekaran has been prompting senior executives within TCS to collaborate with group companies such as Tata Communications and also help them modernize their IT infrastructure.
TCS ended last year with $30.18 billion in revenue, up 3.78% on a yearly basis. This was about five time more than that of Tech Mahindra, which ended FY25 with $6.26 billion, a decline of 0.21%.
This push to look at newer sources of income comes as tariff-related uncertainties in the US are forcing companies to pull back IT spending. The spectre of AI is adding further uncertainty to the Indian IT sector.
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