Whalesbook
Tech Mahindra Chief Executive Mohit Joshi is accelerating the company's turnaround strategy, pushing for a 15% operating margin target by March 2025, a year ahead of the original Project Fortius roadmap. This aggressive push involves intensifying employee AI training, securing higher billing rates for new deals, and reducing non-billable employee time to boost revenue.
Accelerated Margin Push
The company's operating margins have already seen significant improvement, doubling to 12.1% in the quarter ended September 2025. This marks a 100 basis point increase from the prior quarter, signaling early success in Joshi's profitability drive. Project Fortius, launched in April 2024, initially aimed for the 15% margin by March 2027.
Boosting Revenue Streams
While margins improve, Tech Mahindra has faced challenges with revenue growth, lagging behind larger IT peers. Growth has stayed below 2% for the past six quarters, with contractions seen in two of those periods. The strategy now shifts to accelerating revenue once the margin target is met. Increasing billable rates on project renewals is a key tactic.
AI Upskilling Imperative
A critical component of the turnaround involves extensive artificial intelligence training. Tech Mahindra aims to upskill its entire workforce of over 1.5 lakh employees. Already, more than 80,000 employees have undergone AI and Generative AI training, with AI certifications becoming mandatory. The company utilizes a structured proficiency framework from introductory 'White Belt' to expert 'Black Belt' levels.
Analyst Outlook
Industry analysts note the visible levers for margin expansion, including tighter cost controls and portfolio pruning. Phil Fersht of HFS Research stated that achieving the target early requires disciplined execution and sustained demand. Kotak Institutional Equities views Joshi's margin expansion strategy positively, projecting Tech Mahindra to remain on track for its aspirations. The company is set to announce its third-quarter results on January 16.