Despite being one of the slowest-growing among India's top ten IT services firms, Tech Mahindra Ltd has boldly reaffirmed its commitment to achieve revenue growth above the peer average by March 2027. The company's ambitious three-year roadmap, announced in April last year, faces its toughest test yet as it navigates challenging macroeconomic conditions and client spending uncertainty.
The Growth Challenge and CEO's Confidence
During the Mahindra Group investor conference in Mumbai on November 20, Chief Executive Officer Mohit Joshi expressed confidence that revenue growth would accelerate as macroeconomic conditions improve by March 2027. However, the company faces a significant hurdle: it must report revenue growth after two successive years of revenue decline. This challenge comes at a time when uncertainty around client spending is leading to increased vendor consolidation across the industry.
Tech Mahindra reported a compounded quarterly growth rate of just 0.41% between April 1, 2024, and September 31, 2026, placing it ahead of Tata Consultancy Services Ltd's 0.23% and Wipro Ltd's revenue decline of 0.34%, but significantly behind Infosys Ltd's 1.8% and HCL Technologies Ltd's 1% growth.
Margin Improvement and Strategic Shifts
Under Joshi's leadership, Tech Mahindra has demonstrated remarkable improvement in operating margins, which have grown by about 470 basis points to 12.1% - the fastest among the big five IT firms. In contrast, TCS and HCLTech saw their profitability fall by 80 basis points and 10 basis points respectively.
This margin expansion primarily resulted from lower subcontracting costs, elimination of low-margin accounts, and higher margins from fixed-price projects. The company's strategic three-year roadmap, outlined four months after Joshi took over as CEO, targets operating margins of 15% by March 2027 while reducing dependence on telecom companies that currently make up 40% of its business.
Ambitious Growth Targets and Brokerage Analysis
According to brokerage analyses, Tech Mahindra's full-year revenue targets imply a growth of 4-8% by the end of FY27. Bank of Baroda Capital Markets analysts Girish Pai and Lopa Notaria noted in their November 21 report that the company expects modest industry growth pick up in FY27, likely increasing by a couple of percentage points from the 0-2% range expected in FY26.
HDFC Securities analysts provided even more specific projections, indicating that Tech Mahindra is aspiring for about 1.3x revenue growth over FY20-27, which implies approximately 4.8% dollar revenue CAGR over FY25-27 and about 7-8% growth for FY27. This represents nearly four times its expected pace in FY26.
The company aims to reach industry growth rate by FY27 through strategic investments in key markets, high-growth service lines including consulting, data & AI, and engineering services, and aggressive account mining focusing on accounts exceeding $20 million.
Current Performance and Future Projections
Tech Mahindra ended the April-September 2025 period with $3.15 billion in revenue, up just 0.06% from the year-ago period. To match last fiscal's revenue of $6.26 billion, the company needs $3.11 billion in the ongoing six months - a target that appears achievable given its quarterly target of $1.56 billion.
However, if the company manages only 2% growth in FY26, it would end the fiscal with revenue of $6.34 billion. To achieve 8% growth next fiscal, it would need to add more than $500 million incrementally after two consecutive years of revenue decline.
Strategic Advantages and Group Synergies
Business predictability remains a cornerstone of Tech Mahindra's three-year plan. CEO Mohit Joshi emphasized their vision for FY27 includes not just superior top-line growth and industry-standard margins, but also a high degree of predictability in revenue and profitability that has been missing in the past.
The company is strategically positioning itself to benefit from group companies, particularly the automotive division. According to Bank of Baroda analysts, Tech Mahindra benefits from engineering services and manufacturing work with its auto parent, which it can leverage with clients.
Beyond group synergies, Tech Mahindra is prioritizing expansion into banking, retail, logistics, and healthcare sectors while anticipating that a potential India-US trade deal could unlock non-essential IT spending.
Persistent Challenges and Competitive Landscape
Despite the optimistic outlook, challenges remain. Joshi indicated very competitive bidding on some large deals with annual productivity pass-back requirements. While the company has successfully penetrated some key BFSI accounts, the deal flow hasn't met Joshi's own expectations.
In the current vendor consolidation environment, Joshi highlighted that it becomes harder for a new vendor to break through, presenting additional hurdles for growth initiatives.
Tech Mahindra, which traditionally considered telecom services its special strength, is now doubling down on banking, retail, logistics, and healthcare to narrow the growth gap with peers. Currently, about one-third of its revenue comes from these sectors.
As Tech Mahindra navigates these challenges while pursuing aggressive growth targets, the IT industry watches closely to see if Joshi's strategic vision can transform one of India's most prominent IT services providers into a growth leader by March 2027.
