Tech Mahindra’s turnaround is real but still in progress. In Q1 FY27, the company reported 6.6% year-on-year revenue growth in constant currency and a 14.4% EBIT margin, putting it close to its FY27 margin target. Its growth led several large Indian IT peers in that quarter, but it has not led peers across the entire turnaround period: earlier comparisons showed it lagging on revenue growth even as its margin gains stood out.
Why Tech Mahindra’s turnaround matters
Tech Mahindra entered the turnaround with a clear performance problem: its growth and margins needed to improve relative to large IT-services competitors. Mohit Joshi, who became CEO and Managing Director in 2023, announced a three-year plan in April 2024. The plan set measurable goals for FY27 rather than relying on a broad promise of improvement.
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Joshi joined from Infosys, where he had been president, led its Mexico business as CEO, and chaired EdgeVerve. Tech Mahindra says he has more than two decades of enterprise technology software and consulting experience and holds an MBA from the Faculty of Management Studies at the University of Delhi. He succeeded C.P. Gurnani, a 15-year veteran of the company, about six months before the plan was announced. Joshi later told Business Today that making the goals explicit was central to focusing the organisation: “I think the single best thing that we did was articulating a very clear sense of what we would do in three years, backed by numbers.”
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One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchWhat the FY27 plan set out to achieve
The plan’s goals cover growth, profitability, capital efficiency, and shareholder returns. They are targets, not evidence of completed results.
| Measure | FY27 target |
|---|---|
| EBIT margin | 15% |
| Revenue growth | Ahead of peers |
| Return on capital employed (ROCE) | Above 30% |
| Free cash flow returned to investors | More than 85% |
Management described the first year as foundation-building for margin expansion and the final year as the period to deliver growth ahead of peers. The annual report also frames the plan around accelerating growth, improving margins, and strengthening the company’s market position.
What the results show so far
By FY26, Tech Mahindra reported a 12.6% EBIT margin, up about 290 basis points year on year, and said its margin had expanded for 10 consecutive quarters. The company also reported $3.794 billion in deal wins, its highest total in five years. Free cash flow was $616 million, equal to 115% of profit after tax; 91% of FY26 free cash flow was returned as dividends.
On its Q1 FY27 earnings call, Joshi reported revenue of $1.66 billion and an EBIT margin of 14.4%. Constant-currency revenue grew 6.6% year on year. The margin was close to the 15% FY27 target, but that progress does not establish that the other targets—especially growth ahead of peers and ROCE above 30%—have been achieved.
Why “fastest-growing” needs a time period
Business Today’s Q1 FY27 comparison showed Tech Mahindra growing 2.6% quarter on quarter in constant currency, ahead of TCS at 0.4%, Infosys at 1%, HCL Technologies at -0.5%, and Wipro at -1.2%. On a year-on-year basis, Tech Mahindra’s constant-currency growth was 6.6%, compared with TCS at 3.2%. Business Today cautioned that Tech Mahindra’s growth may have come from a low comparison baseline.
That quarter does not describe the full turnaround. Mint’s comparison for 1 April 2024 to 30 September 2025 put Tech Mahindra’s quarterly compounded revenue growth at 0.41%, behind Infosys at 1.8% and HCL Technologies at 1%; TCS was at 0.23% and Wipro at -0.34%. In that same earlier window, Mint said mid-cap IT-services companies recorded quarterly compounded growth of 1.3% to 8.3%. Mint’s comparison instead found Tech Mahindra’s margin improvement led the five large companies it assessed: about 470 basis points, to 12.1%, through its November 2025 comparison.
The apparent contradiction is a matter of period and measure. Tech Mahindra could lead a named peer set in one quarter while trailing some peers over an earlier multi-quarter revenue-growth window. Its margin trend was stronger than its earlier revenue-growth trend.
What management changed
Tech Mahindra and Business Today describe a combination of commercial, operational, and organisational changes. These are management’s account of the turnaround; the available results do not isolate the impact of any one intervention.
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Sharper choices about clients and deals
The company focused its vertical and customer strategy, invested in account development, and shifted emphasis toward organic growth rather than acquisition-led expansion. Management also said it would avoid deals it judged economically unattractive and revisit pricing. Its FY26 annual report highlights disciplined execution of large deals and deeper client relationships. It reported 182 new clients in FY26 and deeper relationships with 29 clients generating more than $50 million.
Productivity and operating discipline
Reported operational priorities included improving employee utilisation, using technology to raise productivity and control costs, and building an operational mindset. Tech Mahindra also points to AI-led capabilities and AI and automation as ways to improve productivity and margins. Those are strategic levers, not proof that AI alone produced the reported financial gains.
Broadening sector exposure
The company has aimed to reduce its dependence on telecom and expand in areas including banking, financial services and insurance (BFSI), manufacturing, healthcare, and retail. The annual report also identifies Communications and Manufacturing as growth areas. Atul Soneja, Tech Mahindra’s chief operating officer, said Q1 results reflected “the turnaround and stabilisation achieved through the investments we made to fuel the right kind of growth and build an operational mindset within the organisation.”
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What investors should watch next
- Growth beyond a single quarter: Check whether revenue growth stays ahead of peers across subsequent reporting periods, and compare like with like: quarter-on-quarter or year-on-year, constant currency or reported currency, and the same peer set.
- Margin gains alongside growth: Large-deal ramp-ups can affect costs and onsite intensity. The next test is whether the company can expand revenue without giving back the margin improvement.
- Capital efficiency and cash returns: The FY27 goals include ROCE above 30% and returning more than 85% of free cash flow. FY26’s reported 91% dividend return is a result for that year, not proof the FY27 target has already been met.
- Changing service demand: Business Today identifies pressure on traditional IT services from AI and the need to move toward newly forming service demand. Execution will depend on whether new capabilities translate into durable client spending.
Tech Mahindra says it aspires to sustain growth above peers beyond FY27, but that remains an ambition. Everest Group CEO Jimit Arora told Business Today that the next phase requires sustained execution to protect margin gains while sustaining growth.
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How to read the turnaround claim
For a personal-finance reader evaluating the business, separate four questions: whether revenue is growing, whether margins are improving, whether capital is being used efficiently, and how much cash is returned to shareholders. Tech Mahindra has reported meaningful margin progress and strong FY26 cash generation. The evidence for peer-leading growth is more period-dependent, and the FY27 targets for growth and ROCE remain open tests. “Fastest-growing” is therefore an accurate description only for the specific Q1 FY27 comparisons reported by Business Today—not a settled ranking across all Indian IT firms or the whole turnaround.
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