NEW DELHI, Mar 9: The strategy set by the new leadership three years ago at Tech Mahindra to sharpen the company’s position for faster and sustainable growth is giving returns, which is getting reflected in improved operating margin and increase in large deals, a top official of the IT firm said.
Tech Mahindra CEO & Managing Director Mohit Joshi told PTI that as the world is navigating through a tectonic shift towards a new era of enterprise intelligence led by AI empowered design and engineering, the company’s focus is shifting from stabilisation to acceleration.
The operating margin during the December 2025 quarter expanded by close to 100 basis points to 13.1 per cent, marking the ninth consecutive quarter of margin expansion for the company.
Further, our commercial momentum has strengthened, with a 48 per cent increase, including large deal volumes over the past 12 months. This reinforces our belief that clients are responding positively to our sharper positioning, disciplined deal selection, and growing capabilities across AI-led transformation, engineering and manufacturing services, telecom modernisation, and GCCs, Joshi said.
Analysts at PL Capital said margin performance of Tech Mahindra continued to surprise at 13.1 per cent, which was more than their estimate of 12.6 per cent.
“The margin expansion was largely driven by gross margin improvement from Project Fortius-led efficiencies, with a modest currency tailwind of around 20-30 basis points,” the PL Capital report said.
Tech Mahindra’s total contract value (TCV) of new deal wins surged to USD 1,096 million, marking the highest quarterly booking in five years and a 47 per cent increase over the previous year.
On the strategy rolled out by the company after taking over the reign three years ago, Joshi said, “When we unveiled our three-year turnaround roadmap, in April 2024, our intent was clear. We wanted to strengthen the core of the organisation by sharpening our portfolio, simplifying operations, improving execution discipline, and reinforcing confidence among clients, employees, and investors.”
He said the company’s effort and new strategy have started to translate into measurable outcomes over the last 18 months.
Joshi took over the charge of Tech Mahindra in December 2023. In April 2024, the company had put in place a new phase-wise three-year turnaround roadmap Vision 2027 to Scale at Speed with the aim to deliver better topline growth than the average of top Indian IT peers.
The company also restructured the organisation into six strategic business units with the aim to foster agility and accountability.
Tech Mahindra closed the March 2024 quarter with around 41 per cent year-on-year decline in consolidated profit at Rs 661 crore from Rs 1,118 crore and around six per cent year-on-year dip in revenue from operations for the quarter.
For the year ended FY24, Tech Mahindra’s profit had more than halved to Rs 2,358 crore and revenue had declined about 2.4 per cent to Rs 51,996 crore, reflecting pressure on the margin.
The company identified FY25 as a turnaround phase, FY26 as stabilization period, and FY27 as reaping returns phase.
An analyst report by Axis Direct after the company’s December 2025 quarter performance said Tech Mahindra’s overall deal pipeline remains strong, with a continued focus on scaling the digital business.
“We remain constructive on the long-term outlook and expect sequential growth to continue in the coming quarters,” the report said.
ICICI Securities has reduced earning per share (EPS) estimates of Tech Mahindra by 4.2 per cent due to a one-time exceptional charge pertaining to labour codes but increase EPS estimates for FY27 and FY28 by 4.2 per cent and 1.9 per cent, respectively, led by an increase in revenue estimates for both years and improvement in margins estimated for FY26.
Former ThirdEye Advisory, CX Expert, and advisor, TJ Singh, said the rebranding exercise prepares Tech Mahindra for the future to meet the needs of the next generation augmented enterprises.
After 13 years, we are getting a brand refresh from Tech Mahindra that holds on to its core values while radiating ambition and a future promise.
On the other hand, the company’s headcount fell to 1,49,616 (down 3,098 employees) in the December 2025 quarter, due to the company’s ongoing transformation programme focused on fixed-price projects and not due to broad cost-cutting initiatives.
Joshi has attributed reduction in headcount to attrition while the company continues to redeploy talents being freed from other projects instead of hiring new employees.
Tech Mahindra has also not decided the wage hike cycle for the current fiscal as it is evaluating implications of the new labour code notification. (PTI)
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