In a decisive move to accelerate its ongoing transformation, Tech Mahindra's chief executive Mohit Joshi has set an ambitious internal target to achieve the company's key profitability goal a full year ahead of schedule. The Pune-based IT services giant is now pushing to reach its 15% operating margin target by March 2026, instead of the original March 2027 deadline outlined in its three-year turnaround plan, Project Fortius.
The Push for Early Profitability
During a virtual townhall in the last week of December 2025, Joshi addressed over 300 senior executives, urging them to drive the company closer to the coveted 15% margin mark by the end of the current fiscal year. This internal push signifies a confident acceleration of the strategy unveiled in April 2024. The CEO, who took the helm two years ago, is focusing on several key levers to achieve this goal.
According to sources familiar with the discussions, the leadership is emphasizing winning more deals at higher rates, drastically reducing the time employees spend on the bench between projects, and massively scaling up artificial intelligence (AI) training for its workforce. This aggressive stance comes as Tech Mahindra, India's fifth-largest software services exporter, has trailed behind its larger peers in revenue growth over recent quarters.
Margin Expansion Strategy Bears Fruit
The focused execution of Project Fortius is already showing significant results. The company's operating margin has seen a remarkable improvement, doubling to 12.1% for the quarter ended September 2025. This represents a 100 basis point jump from the previous quarter, demonstrating the efficacy of the turnaround measures.
Analysts point to clear margin expansion levers such as stringent cost control, pruning of unprofitable accounts, rationalization of the employee pyramid, and early benefits from simplifying delivery processes. Phil Fersht, CEO of HFS Research, noted that achieving the target a year early would require sustained favorable demand and flawless execution on pricing and utilization.
Kotak Institutional Equities, in a note dated January 2, 2026, expressed optimism, stating that incremental margin levers are limited for most IT firms, with Tech Mahindra being a notable exception. The brokerage firm believes the company remains on track to achieve its stated aspirations.
Driving Growth Through AI and Efficiency
A cornerstone of Joshi's strategy is the comprehensive upskilling of Tech Mahindra's 1,52,400-strong workforce in AI. The company has instituted a mandatory AI certification program for all employees, with a structured framework spanning from introductory 'AI White Belt' to expert-level 'AI Black Belt' proficiencies. A company spokesperson confirmed that over 80,000 employees have already been trained in AI and Generative AI, building on the 65% upskilling achieved in the previous fiscal year.
Concurrently, the management is instructing leaders to negotiate higher billable rates during project renewals to boost revenue. Furthermore, the company is successfully reducing the non-billable 'bench' period for employees. Sources indicate that the idle time is now down to around 90 days or less in many cases, a significant improvement from the extended periods witnessed earlier.
This immediate deployment of staff onto billable projects is a direct contributor to improving revenue. For the second quarter ended September 2025, Tech Mahindra's revenue saw a sequential growth of 1.41%, reaching $1.59 billion. The company is scheduled to announce its third-quarter results on January 16, 2026.
While the holiday season in the third quarter may pose a challenge due to fewer working days, the company is likely to meet its Q3 revenue target of $1.56 billion barring any unexpected business losses. The success of this accelerated turnaround will be closely watched as Tech Mahindra strives to close the growth gap with its industry leaders and solidify its market position.
