From middling to fastest-growing large IT firm: How Mohit Joshi turned around Tech Mahindra

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When former Infosys president Mohit Joshi was named as the CEO-designate of Tech Mahindra in March 2023, it raised eyebrows. For he had moved from Infosys, India's second largest IT firm to the fifth largest. Tech Mahindra then was also wrought by multiple headwinds - anemic growth, wafer-thin margins and an unclear roadmap.

Two years on, Joshi appears to have turned the company’s fortunes around. Revenue has grown, operating margins have more than doubled and Tech Mahindra’s stock has surged, at a time when its peers and the overall IT index has been languishing as the sector struggles to find its growth mojo amid the AI shift.

Conviction marked the early days of Joshi’s stint at Tech Mahindra. The company’s now MD and CEO was clear that he had little time to turn things around, and that the first year would be make-or-break.

“You have to front load the change. If you don't do it in the first year of your tenure, you can never do it,” Joshi told Moneycontrol as he sat down for an hour-long conversation last month. He was referring to the initial targets his team managed to achieve after had had set out a three-year business transformation plan ‘Vision 2027’ in 2024.

When he took over the role from Mahindra group veteran CP Gurnani, Joshi was seen as the outsider who had led rival Infosys’ global BFSI and life sciences portfolio for the longest time. The BFSI segment alone accounted for over $5 billion in annual revenue, contributing nearly 30 percent of Infosys’ overall revenue at that time.

This was also close to Tech Mahindra’s annual revenue in FY24 of $6.27 billion, while the EBIT margin for the full year was at 6.1 percent.

Unveiled at the beginning of FY25, Vision 2027 started with three ambitious targets: increasing the IT firm’s operating margin to 15 percent by FY27, have higher topline growth beating the peer average of top six-seven IT services players, reaching return on capital employed at 30 percent.

Tech Mahindra also started a capital allocation policy of returning 85 percent of free cash flow to investors.

The company is now entering the last leg of its transformation journey in H2FY27, having closed the first quarter of the financial year with an EBIT margin of 14.4 percent and USD revenue growth of 6.1 percent YoY.

“Mohit brings the combination of deep industry experience, excellent strategic thinking, and mature executive leadership skills that others follow. His performance at Tech M has been extemporary taking an underperforming firm to one which is now a leader in growth and margin expansion,” said Peter Bendor-Samuel, founder and executive chairman, Everest Group.

The three hypotheses

Joshi called himself “lucky” to have gotten several months to transition under Gurnani, as he joined in March 2023 and the latter was set to retire in December that year. He used the time in between to chart a strategy to leverage the parent Mahindra Group’s sectoral relationships with clients and combining them with Tech Mahindra’s existing strong segments to diversify beyond the IT firm’s core sectors including telecom.

“The fact that the company had a very strong DNA in the package application in the consulting space because of the Satyam acquisition -- that maybe was a little bit under leveraged I felt,” he said.

Joshi said he realised three things soon. The company had very high-quality talent with average experience of nine to 10 years; it had strong engineering culture from Mahindra and had consulting capabilities from Satyam acquisition.

It had an enviable mix of clients across the board although many of them were very small, providing significant headroom for growth. The third area was to strengthen linkages with the parent group further in their specialised areas including auto, financial services, real estate, energy and aerospace.

“There was an opportunity to leverage the breadth of the connections that the group had to be able to win us clients, to be able to win us business. These were the three hypothesis I was focusing no,” Joshi said.

Restructuring plan

Perhaps the biggest immediate internal shift Joshi brought was a new organisational structure that helped the company approach clients and deals in a focused and aggressive manner.

“CP (Gurnani) had grown up with the company and the company had grown up with CP. One of the first things I told CP was it almost seemed like everybody in the company, all the 150,000 people, were reporting directly to you. There was no organisational structure on a page.”

He added, “There were some very visible talent gaps in the organisation. Many people were double hatting. So, the former CHRO (Harshvendra Soin), for instance, also used to be the chief marketing officer.”

He “delinked” several leadership roles, bringing industry veterans including new chief operating officer Atul Soneja, chief HR officer Richard Lobo, chief marketing officer Peeyush Dubey onboard, among others. Given Soin’s decades of experience at the company, he was moved to a core business and sales focused role as the President of Asia Pacific and Japan business.

Joshi had simplified Tech Mahindra’s previous structure of 12 sales units to just six units. These six focussed units include Americas Communication, Americas Technology Media, Americas diversified, EMEA (Europe, Middle East and Africa), APJ (Asia Pacific and Japan), and India.

Tech Mahindra had also introduced a margin-improvement plan Project Fortius that looked at cost optimisation, improving employee utilisation and hiring. And the Turbocharge Program, wherein the company had identified top 80 accounts that it planned to build and expand deeper business relationships with.

When asked if there was a fear of push back as an outsider, Joshi said, “CP’s departure was timely after a long and successful stint. That was helpful. Secondly, bringing everybody into the conversation was helpful and had lowered the temperature within the organisation.”

“My fear was that the organisation would push back heavily. But I was pushing against an open door as people wanted the change, they wanted the clarity, they wanted a clean organisation structure. There was obviously a lot of support from the board,” he said.

Joshi’s turnaround plan was going to be an uphill battle. The company’s organic growth at the time of his joining was 3-5 percent lower than its peers, coupled with significant volatility in revenues and margins. “We were being heavy discounted as compared to our peers in terms of our price-to-earnings ratios. Our top accounts were not growing as fast. The board understood these things.”

Phil Fersht, founder and CEO of HFS Research highlighted Joshi’s approach on bringing a much more structured, metrics-driven operating discipline to Tech Mahindra. Fersht compared his strategy here, calling it a “reminiscent of the Infosys discipline he grew up with”, particularly the obsession with account economics, large-client growth and repeatable execution.

“Joshi simplified the business into six major units, centralized more of delivery, prioritized the accounts that mattered and put much greater rigor around large deals, account mining and margin management,” he said.

“The biggest change has been moving Tech Mahindra from an entrepreneurial collection of businesses into a more integrated operating company,” he added.

Setting the stage for growth

While earlier the company had separate large deals teams within each business unit, Joshi had replaced that structure, starting a dedicated Strategic Solutioning and Transformation group to target large deals.

Under the Turbocharge Programme, the company identified lower quality accounts it wanted to get rid of and consciously chose to steer away from bidding for projects that came with limited or lower margin opportunities.

This strategy eventually paid off. As of Q1FY27, Tech Mahindra had delivered three consecutive quarters above $1 billion in new deal wins, and its $50 million-plus client base increased by seven by Q1 FY27. That suggested the account-mining and large-deal strategy is beginning to show through in the numbers.

Despite coming off a lower growth base than several of its larger peers, its deal pipeline has strengthened considerably, and FY26 deal wins reached $3.79 billion, the strongest level in five years, shared Fersht.

Within the last one year, the company also won two of its mega deals, one of them being a $500 million plus, five-year contract with Telefónica O2 for modernizing applications.

“But with large deals, I will always say that these things are lumpy. You cannot rest on your laurels because the competition is getting hungrier. We must ensure we are able to keep the momentum going,” Joshi said.

Anand Mahindra’s backing

In Tech Mahindra’s rebuilding journey, Joshi believes Mahindra and Mahindra chairman Anand Mahindra was the “best salesperson” for the company.

“In terms of his ability to engage with clients and explain not just Tech Mahindra’s vision and ambition, but also the larger Mahindra Group story, it is very appealing. We have also used him very extensively in a lot of our client discussions, deal discussions because he brings a very different flavour to the discussion,” he said.

He added, “The support from the board was very useful and obviously the board also has been seeing the results over the past three years.”

While Mahindra Group remains an important customer for the IT firm, it contributes less than 1 percent to the revenue. The benefit of having a conglomerate parent comes when accessing its clientele, which includes technology, manufacturing and financial services companies.

Tech Mahindra’s AI play

The company’s turnaround came at a period when the larger IT services industry is grappling with AI-led disruption and slowdown in growth.

While Tech Mahindra’s primary focus in its three-year plan so far was to increase profit and improve net operating margins, in its next phase, the company wants to see revenue growth and AI opportunities take centre stage.

“They (Tech Mahindra) have not panicked when faced with the AI disruption, have made focused investments and been disciplined in their approach to industry transformation,” said Bendor-Samuel.

Tech Mahindra is the only IT services company to build its own large language model of 8-billion parameters and was selected under IndiaAI Mission.

“AI clearly was already on the radar in April ’24. It will now be front and centre in every single client’s focus in April ’27. There’ll be more focus on revenue growth and more focus on making the AI narrative even stronger as a component of our story. Project, however, will be very small. A lot of the spend in terms of revenue will still be on the modernization side or the support side or the data side,” Joshi said.

When compared to peers TCS and Infosys, Fersht said Tech Mahindra is yet to reach their overall AI scale or market presence, but it has become more credible in AI over the last 18 months with the launch of its agentic AI platform Orion.

The platform has more than 350 service and industry-specific agents, alongside governance, multi-agent orchestration and model flexibility, and it has started experimenting with outcome-aligned models such as Vector Squads and Service Tokens.

According to Fersht, Tech Mahindra can differentiate in certain areas, especially telecom, network operations, engineering, sovereign AI and domain-specific models.

“The opportunity is to turn Orion and its vertical IP into genuine Services-as-Software offerings instead of allowing them to remain another collection of accelerators used inside services engagements,” he said.

Strategy beyond FY27

Joshi shied away from setting up a revenue-target based goal, saying that even to outpace the fourth largest player Wipro’s size by revenue, it will need to add $4 billion in additional revenue, which is unlikely to happen without mega acquisitions.

While the company will be more open towards capability-based M&A now, it will primarily continue to chase organic growth more.

“I just want to make sure that the focus of the organisation continues on organic growth because that is the most profitable, that is the most sticky. While we'll obviously be much more M&A oriented than we have been for the past three years. But with the exception of one small acquisition, we've haven’t done anything at all,” Joshi said.