Mahindra Group chairman Anand Mahindra says Tech Mahindra partnering with group companies to transform them

Anand Mahindra exuded confidence in Tech Mahindra’s ability to drive AI-centric technological transformation across businesses. (Photo: PTI)

Mahindra Group chairman Anand Mahindra, who is also the chairman of Tech Mahindra, said the information technology (IT) services company is partnering with companies across the diversified conglomerate’s cars to finance businesses to transform them, without specifying whether this transformation includes integration of artificial intelligence (AI) into their business functions.

“As we speak, it is partnering in the transformation of the Mahindra Group businesses across the Group’s entire network of companies and locations. The Mahindra Group itself is their real-time playing field and proving ground to sharpen their skills,” said Mahindra in a letter to shareholders as a part of Tech Mahindra’s annual report for the financial year ended March 2024.

“If anyone knows how to find the golden thread, how to embroider it across businesses, and how to weave the future with it, it is Tech Mahindra,” he noted.

In the letter, Mahindra exuded confidence in the company’s ability to drive AI-centric technological transformation across businesses. He said that IT services companies would play a key role in integrating AI into the core business functions of companies.

Also Read: Can Mohit Joshi catapult Tech Mahindra into the big league of Indian IT?

“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,” noted Mahindra, basing the company’s potential success on its ability to leverage AI for growth according to its new three-year plan, deep relationship with existing clients, and its partnership with Mahindra Group firms.

Mahindra’s comments are in a vein similar to that of Tata Sons' chairman N Chandrasekaran, who told shareholders at Tata Consultancy Services’ annual general meeting (AGM) last month that the Tata Group was working on 100 Gen AI projects.

A multi-business playground

“All CEOs' priorities is to use Gen AI internally and see how it can impact their own businesses, whether positively or negatively. This is not a new trend,” said Shriram Subramanian, founder and managing director of proxy advisory firm InGovern Research.

Mahindra Group—Tech Mahindra’s parent company—has stakes in businesses ranging from financial services to holiday resorts. It enjoys a combined market capitalisation of $62.5 billion as of June 2024.

Also Read: Tech Mahindra’s strategy gives hope, but watch out for risks along the way

Tech Mahindra’s performance in the last financial year was not notable. The software services company ended March 2024 with $6.28 billion in revenues, which is 5% lower than the year ended March 2023. Its operating margins crashed 530 basis points to 6.1%, which was the lowest of the top five Indian IT services companies.

Last year also saw the company undergo a change at the top. Mohit Joshi took over the reins of the company as chief executive (CEO) from CP Gurnani—who had been at the helm of the company for the past 15 years—in December 2023.

A focus on growth

Joshi, in his first quarter in the top job, unveiled a three-year plan, Project Fortius, to drive the company towards growth. As part of the plan, the company aims to double profitability, simplify the organisation's structure, and increase engagements with its largest clients.

“Accelerating revenue growth and improving margins will be the key focus throughout this period,” said Joshi in his inaugural letter to the shareholders as a part of the annual report.

Also Read: Tech Mahindra Q4 Results: Net profit at ₹661 crore, revenue at ₹12,871 crore

Interestingly, while Gen AI is now a part of boardroom discussions across companies and industries, Joshi’s letter had just one mention of AI, as the former Infosys executive focussed his narrative on driving growth.

While industry-matching growth seems to be Joshi’s focus, he also faces the challenge of having a stable leadership team. Mint has learnt from two people aware of the matter that a dozen senior executives have left the company since Joshi took over as CEO.