Tech Mahindra eyes turnaround year with investments, cost optimization

Anand Mahindra, chairman of IT services firm Tech Mahindra believes that the future belongs to the information technology (IT) services as it can bring synergy between IT and artificial intelligence (AI) to usher in a new era of technological prowess.

“The race does not necessarily belong to the large or the most specialised. The winners will be companies that are agile, well-prepared and can scale at speed,” he said in his address to shareholders in the Annual Report.

He further added, as organisations strive to stay ahead in the digital race, IT services will play a pivotal role in enhancing that Golden Thread by integrating AI seamlessly into the core business functions. “Even without a crystal ball, I can venture to predict that Tech Mahindra, under its new leadership, is well-positioned to leap into this new orbit,” said Mahindra.

Meanwhile, the company’s CEO and managing director, Mohit Joshi said that Tech Mahindra is set for a “turnaround year” as it makes new investments and “optimises” costs.

The company’s revenue from operations in FY24 fell 2.42 per cent to Rs 51,996 crore compared to Rs 53,290 crore the year before. “FY25 will be the turnaround year for us, marked by new investments in our key accounts and service lines. We will drive the integration of our portfolio companies, focus on our largest clients, and prioritise cost optimisation,” said Joshi in a letter to shareholders in the firm’s annual report.

Launches LLM
Tech Mahindra announced the launch of Project Indus, its indigenous foundational model designed to converse in multiple Indic languages and dialects.

The first phase of the large language model (LLM) will support Hindi language and more than 37 of its dialects.

“Project Indus is our seminal effort to develop an LLM from the ground up. Our collaboration with Dell Technologies & Intel will
help deliver cutting-edge AI solutions that enable enterprises to scale at speed,”said Nikhil Malhotra, Global Head, Makers Lab, Tech Mahindra.

“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 optimised state with an improved structural mix and a pyramid.”

Joshi said the company would follow a “three-pronged” approach for growth, operations, and organisation in FY27. “It will help us drive top line growth, achieve industry-standard margins, and most importantly, ensure a high degree of revenue and profitability predictability.”

“Over the last few years, we found ourselves operating amidst a dynamic landscape, where markets evolve at breakneck speed, customer expectations shift overnight, and disruptive innovation emerges seemingly out of nowhere.”

“Traditionally, organisations embarking on a tech transformation journey have faced a challenging trade-off as achieving massive scale often comes at the expense of agility. Eventually, this duality of scale or speed has morphed into the need for scale at speed, which has certainly been accelerated with AI, and it is this imperative that defines the Tech Mahindra promise – Scale at Speed,” said Joshi. Business Standard