Shares of Tech Mahindra hit a 10 percent upper limit at Rs 1,309.30 after the company's CEO and MD Mohit Joshi on April 25 unveiled a three-year roadmap to turn around the IT services major’s slowing business, with an aim to drive better revenue growth than peer average and optimising margin improvement by FY27.
Tech Mahindra shares have gained over 7 percent so far in April after having seen negative monthly returns consecutively in February and March.
Joshi said that the turnaround will be happening in phases based on the fiscal year. In FY25, Tech Mahindra will be in a ‘turnaround phase’, when the focus will be on anchoring the new organisation, investing into key accounts, markets and service lines. At this stage, the work will be to integrate front-end portfolio companies, focus on turbocharge programme for key account growth and starting Project Fortius for cost optimisation.
Joshi laid down his ‘Vision 2027’ to focus on organisational restructuring, phased business improvements and investments, along with utilising synergies with the larger Mahindra Group businesses.
Also Read | Tech Mahindra Q4 results: Net profit declines 40.9% YoY to Rs 661 crore, revenue drops by 6.2%
The company introduced Project Fortius, a program in which the management will work on multiple levers over the next three years to drive margin growth.
FY26 will be the ‘Stabilisation Phase’ for the company, where the investments will continue, and Project Fortius is expected to progress on cost savings.
By FY27, the company expects to start ‘Reaping Returns’ with improved long-term structural mix and continued improvement in pyramid.
The company will further double down on building its telco, manufacturing, BFSI and AI verticals.
By FY27, Tech Mahindra has set a goal to expand EBIT margin to 15 percent and have higher topline growth as compared to peer average of top six-seven IT services players.
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