India’s TCS to buy Porsche’s IT unit, bags five-year deal worth R23bn

Tata Consultancy Services will buy Porsche AG’s automotive and consulting unit MHP, the IT major said on Monday, as part of a wider partnership under which Porsche has committed €1.25bn (R23.38bn) for the Indian firm and MHP.

The deal comes at a time when AI has been disrupting traditional outsourcing models in India’s $315bn (R5.04 trillion) IT industry, with clients pausing tech spends.

MHP is an automotive and industrial consulting firm that specialises in business consulting and software-defined mobility. The deal, for an enterprise value of €320m (R5.98bn), is expected to close in the next three to four months, TCS said.

The wider five-year pact is tied to deploying AI across Porsche’s engineering, manufacturing, operations and customer experience verticals, as well as developing automotive technology and software-defined mobility platforms, TCS said.

Porsche is part of the Volkswagen group, which is under pressure to cut costs and trim back its sprawling portfolio as it faces pressure from Chinese competitors, tariffs and EV costs.

The firm sold stakes in sports-car makers Bugatti and Rimac earlier this year and scrapped three subsidiaries, including its battery unit Cellforce and e-bike business, costing more than 500 jobs.

“The deal will be adding to TCS revenue. It is similar to Harman DTS, Olam acquisitions done by Wipro where companies would land and expand. It will have a neutral impact on the stock and overall capability of the company,” said Piyush Pandey, an IT analyst at brokerage Centrum Broking.