Tech Mahindra Chairman Anand Mahindra said that the advent of artificial intelligence (AI) will have enormous ramifications on IT services and the company under its new leadership is on course to "leap into this new orbit".
Mahindra highlighted the IT services major’s three-year strategy to turn around its business amid the AI boom. Tech Mahindra struggled over the past several quarters with slowing business and margins plunging significantly.
“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. From extracting data-driven insights to solving industry-specific problems to revolutionising customer engagement, the synergy between IT and AI will enable a new era of technological prowess. It will require higher-order work. It will call for upskilling,” Mahindra said in his letter to shareholders in the company’s annual report for FY24.
“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.”
According to Mahindra, the company has made “speed at scale their promise and war cry”. The company’s three-year roadmap for achieving profitable growth, covering every aspect of the organisation – be it structure, strategy, technology, client focus, skill development, talent management, or performance enhancement – has been shared with investors.
“The future landscape is clearly mapped out, and actions are clearly communicated. Given Tech Mahindra’s past record, the enormous experience that the new leadership brings to the table, and this high degree of preparation, I am confident of efficient execution,” he said.
Paraphrasing Mark Twain, he added that “I believe that 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.”
Three-pronged strategy
CEO and MD Mohit Joshi reiterated the company’s three-pronged strategy to revenue growth and improve margins by FY27. The plan focusses on growth strategy, operations strategy and organisation strategy.
Joshi shared in the annual report that FY25 will be the turnaround year for Tech Mahindra, marked by new investments in key accounts and service lines. “We will drive the integration of our portfolio companies, focus on our largest clients, and prioritise cost optimisation.”
FY26 will involve continuing the 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,” he said.
CP Gurnani’s exit
For Tech Mahindra, FY24 marked the retirement of its first chief executive CP Gurnani, who ran the show for the last 11 years in the top role, while working another nine years when the company was focussed solely on telecom services as Mahindra British Telecom (MBT).
Reminiscing his contributions, Mahindra said, “CP brought with him an infectious energy and a tireless entrepreneurial flair. During his 19 years with the company, over 11 of which were as the MD and CEO, MBT morphed into Tech Mahindra, the business vision expanded from the telecom business to a multi-vertical digitally led IT company whose revenue rose 22 times from $280 million in 2006 to $6.3 billion in 2024.”
“His farsighted and people-focussed handling of the Satyam acquisition is a case study in how to turn a problem into an opportunity. The Board and I owe him our grateful thanks for his seminal contribution,” he added.
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