Tech Mahindra has made its 8th acquisition in 10 months, but all that may not be enough to drive growth - Business Insider India

IT firm Tech Mahindra has acquired 100% stake in Europe-based Com tec Co IT (CTC) for 310 million euros (2,628 crore).
This will be the company’s eighth acquisition in FY22.
However, Tech Mahindra’s shares slipped 2% on Tuesday as investors are nervous about the second largest deal done by the company after 2014.
Pune-based information technology (IT) firm Tech Mahindra has acquired Europe-based Com tec Co IT (CTC) for 310 million euros (2,628 crore).
CTC is an IT solutions and service provider serving the insurance and financial services industries with development centres in Latvia and Belarus.
However, Tech Mahindra’s shares slipped 2% on January 18 as investors seemed nervous about the second largest deal done by the company as the company’s past buyouts have gone awry.
Ashish Das, IT analyst at Sharekhan, pointed out that “… in the past some large acquisitions [have adversely] impacted the company.”
This is in context to LCC Pakistan, which was acquired by Tech Mahindra in 2014, which didn't quite work well for the IT firm and they sold it in 2017.
“The growth in the acquired European company is good, but has come only in the last three years while it has existed since 20 years. Management said that the growth is moderating because they have negligible sales capabilities. So Tech Mahindra will have to invest in sales to drive growth,” added Das.
Adding to it, the acquired company has high client concentration as it gets 60% of the revenue from one client.
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