IT services will evolve to become the interface between the potential of AI and its business application, Anand Mahindra, chairman, Tech Mahindra, said in the company’s FY24 annual report. He said that professionals who can understand, interpret, leverage, and exploit the new powerhouse of AI will be the most in demand.
“Tech Mahindra has an edge few other companies have. It is the child of a multi-business corporation. The Mahindra Group itself is their real-time playing field and proving ground to sharpen their skills — if anyone knows how to find the golden thread, how to embroider it across businesses, and how to weave the future with it, it is Tech Mahindra,” Mahindra, also the chairman of Mumbai-based conglomerate Mahindra Group said.
Citing American writer Mark Twain, he said the rumours that the advent of AI will be the death of IT services are grossly exaggerated.
“AI will push these services towards a new frontier, into directions that were hitherto unimaginable — and Tech Mahindra will be in the vanguard,” he said.
According to Mahindra, technology is a golden thread binding an organisation’s work to its future vision, and the power of AI can strengthen this thread. He said that it is impossible to talk about any business today without talking about technology.
“Technology is the Golden Thread that binds what an organisation is doing today with the future world it is trying to create. Across multi-business organisations, it enables synergy and creates unexpected business connections. Across industries, it creates collaboration and transformation,” he wrote.
Despite facing a downturn in the last fiscal year, with revenues dropping to $6.28 billion — a 5% decline from the previous year — and operating margins falling to 6.1%, the lowest among India’s top five IT services companies, Tech Mahindra is poised for a comeback. The company’s transition in leadership saw Mohit Joshi stepping in as CEO in December 2023, succeeding CP Gurnani who led the company for 15 years.
Tech Mahindra anticipates FY25 as a critical turnaround year, marked by strategic investments and rigorous cost optimisations. The aim is to cultivate a more integrated and structurally refined operation by FY27. “FY26 will see the continuation of this journey, aiming to complete the integration of our portfolio companies, and by FY27 we expect to reach an optimized state with an improved structural mix and a pyramid,” Joshi detailed in his letter to the shareholders.
To achieve these ambitious goals, Joshi has outlined a “three-pronged” approach focusing on growth, operations, and organisational structure in FY27. He explained, “This strategy will help us drive top-line growth, achieve industry-standard margins, and most importantly, ensure a high degree of revenue and profitability predictability”.
The company’s strategic pivot comes at a time when the tech industry faces rapid market evolution and shifting customer expectations. “Over the last few years, we’ve been navigating a dynamic landscape, where disruptive innovation emerges almost unexpectedly. This has prompted a reevaluation of how scale and agility can coexist within large organizations,” Joshi said.
Emphasising the transformative potential of AI, Joshi remarked, “Traditionally, achieving massive scale often came at the expense of agility. However, the advent of AI has necessitated a new model — ‘Scale at Speed’ — which is now at the core of Tech Mahindra’s operational promise”.
Beyond strategic restructuring, Joshi is also focused on cultivating talent within the organisation. “We are deeply committed to employee development, with extensive training programmes aligned with the Mahindra University curriculum, ensuring our team is equipped to meet the challenges of tomorrow,” he added.
