MUMBAI: Tech Mahindra, the fifth largest IT exporter, is treading cautiously on the domestic turf, especially in hunting for government contracts, as it sees implementation a "grave risk" in this area.

"Tech Mahindra clearly believes there is an opportunity in the country, but there is a grave risk that the government departments entail on the implementation side," company's Managing Director and Chief Executive CP Gurnani told PTI.

Listing his specific concerns, Gurnani said government gives a "short end" to IT companies when it comes to cash flows, as payments do not come as per schedule and even after completion of the work; more over the contracts are "one-sided".

Additionally, with an increasing bulk of business coming in from government, which has announced the 'Digital India' initiative, there is also a concern about leadership changes at the client side because of the frequent transfers of bureaucrats, he said.

Observing that there is a slew of opportunities like smart city initiative with port management and mobile healthcare, where having smart homes is a necessity, Gurnani said that a surge in data revenues being experienced by telecom players also point towards the same.

The company, which reported a handsome jump on a sequential basis in the September quarter net at Rs 720 crore, has been witnessing a de-growth in revenue from its domestic business in the past two quarters, Gurnani said.