Information technology (IT) services company Tech Mahindra Ltd, which focuses on the telecom industry, is looking for growth in Scandinavia and Israel through acquisitions and its own development centres.

Tech Mahindra, part of the Mahindra conglomerate, will look for an acquisition in Scandinavia while it expects it can expand in Israel without having to buy its way into the high-margin business of project services.

“We are a very telecom-focused company (and) we need to ensure that we can continue to maintain our dominance,” says Rajesh Chandiramani, general manager, sales and marketing, Tech Mahindra. “(Hence) these locations become strategic to us.”

Scandinavia, which consists of North European countries Denmark, Norway Sweden Finland, Iceland and the Faroe Islands, is home to key telecom equipment makers such as Nokia Oyj and Ericsson AB. To Scandinavia goes the credit of first introducing mobile television and the so-called third generation of telecom network services (3G).

Israel, on the other hand, is attracting venture capital funds because of the innovations by domestic information technology there.

“Our strategy for Scandinavia is to acquire a company as language issues make it difficult to grow organically,” said Chandiramani. “In Israel, as we grow our customer reach, it will make sense on a long term basis to look for a development centre.”

Tech Mahindra is looking for an acquisition in the telecommunication sector to acquire more expertise in product engineering, application development, or IT. While the company has already been building a client base in Scandinavian countries for over two years, it has started acquiring clients in Israel on in the past four months.

Tech Mahindra earns about 75% of its total revenue from professional IT services that can also be handled by rival IT services companies. The other 25% of its revenue comes from higher-margin project services.

The company generated Rs2,929 crore in revenue from services during 2006-07.

Some 75% of Tech Mahindra’s total revenue of Rs897 crore in the quarter ended 30 September came from Europe with UK-based BT PLC, a key client and a stake holder, contributing 64% of its total revenue. North America is Tech Mahindra’s second-largest market for the company, accounting for 19% of the company’s total revenue.

Tech Mahindra’s shares closed Friday on the Bombay Stock Exchange at Rs1,141.25 a share. They are well off their 52-week high of Rs2,049.80 set on 18 January.