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What is the story about?
Tech Mahindra is set to introduce a transparent, AI-specific metric within the next quarter to better reflect how artificial intelligence is being priced into deals, reflecting the growing importance of AI in business strategy.
Speaking exclusively to CNBC-TV18 on the sidelines of the World Economic Forum in Davos, Managing Director and CEO Mohit Joshi the current trend of reporting AI-linked revenue was more of a marketing exercise than a true reflection of value creation.
Tech Mahindra, he said, is working on a clearer framework that will help investors and clients better understand how AI is influencing deal economics.
Joshi said the December quarter marked a strong performance for the company, with Tech Mahindra delivering 1.7% sequential revenue growth, a sharp pickup in large deal wins and a ninth consecutive quarter of margin expansion.
He said the turnaround plan outlined to the markets in 2024 was firmly on track, backed by what he described as the best team in the industry.
Despite a challenging and uncertain global environment, Joshi said the company would stick to its 15% margin target for the year, clarifying that this refers to a full-year average. He added that Tech Mahindra still has enough levers to protect margins, while simultaneously shifting focus towards accelerating growth.
The CEO said the company is on course to grow above the peer-average growth range of 3-5%, pointing to the sharp recovery from being at the bottom of the growth curve in FY23 to outperforming peers in the most recent quarter.
He described the turnaround as a remarkable journey achieved in a relatively short period of time.
On the geographic front, Joshi said Europe remains a very important market for Tech Mahindra, with exposure to the auto sector providing a global footprint.
However, he said that telecom continues to be the company's largest business, driven largely by national and domestic demand dynamics rather than global trade flows.
On global uncertainties, Joshi said it is still too early to forecast the impact of tariff wars, adding that trade wars do not benefit any economy. He also said that client spending sentiment has improved this year compared with last year, providing a more supportive demand environment.
On artificial intelligence, Joshi pushed back against earlier fears that AI could be a headwind for the IT services industry, calling it a clear tailwind instead.
He said demand for experienced talent has increased despite AI adoption, with India emerging as the largest pool of trained AI manpower globally.
Using telecom as an example, Joshi said AI presents major opportunities in transforming networks, customer relationships and the B2B landscape.
He said Tech Mahindra is well positioned to leverage these opportunities through a mix of building smaller language models and partnering with hyperscalers and AI providers to drive client transformation.
Joshi added that the company's deal win pipeline remains strong, reinforcing confidence in sustained growth momentum over the coming quarters.
Speaking exclusively to CNBC-TV18 on the sidelines of the World Economic Forum in Davos, Managing Director and CEO Mohit Joshi the current trend of reporting AI-linked revenue was more of a marketing exercise than a true reflection of value creation.
Tech Mahindra, he said, is working on a clearer framework that will help investors and clients better understand how AI is influencing deal economics.
Joshi said the December quarter marked a strong performance for the company, with Tech Mahindra delivering 1.7% sequential revenue growth, a sharp pickup in large deal wins and a ninth consecutive quarter of margin expansion.
He said the turnaround plan outlined to the markets in 2024 was firmly on track, backed by what he described as the best team in the industry.
Despite a challenging and uncertain global environment, Joshi said the company would stick to its 15% margin target for the year, clarifying that this refers to a full-year average. He added that Tech Mahindra still has enough levers to protect margins, while simultaneously shifting focus towards accelerating growth.
The CEO said the company is on course to grow above the peer-average growth range of 3-5%, pointing to the sharp recovery from being at the bottom of the growth curve in FY23 to outperforming peers in the most recent quarter.
He described the turnaround as a remarkable journey achieved in a relatively short period of time.
'Europe very important market for TechM'
On the geographic front, Joshi said Europe remains a very important market for Tech Mahindra, with exposure to the auto sector providing a global footprint.
However, he said that telecom continues to be the company's largest business, driven largely by national and domestic demand dynamics rather than global trade flows.
On global uncertainties, Joshi said it is still too early to forecast the impact of tariff wars, adding that trade wars do not benefit any economy. He also said that client spending sentiment has improved this year compared with last year, providing a more supportive demand environment.
On artificial intelligence, Joshi pushed back against earlier fears that AI could be a headwind for the IT services industry, calling it a clear tailwind instead.
He said demand for experienced talent has increased despite AI adoption, with India emerging as the largest pool of trained AI manpower globally.
Using telecom as an example, Joshi said AI presents major opportunities in transforming networks, customer relationships and the B2B landscape.
He said Tech Mahindra is well positioned to leverage these opportunities through a mix of building smaller language models and partnering with hyperscalers and AI providers to drive client transformation.
Joshi added that the company's deal win pipeline remains strong, reinforcing confidence in sustained growth momentum over the coming quarters.
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