TECHM

’s Project Fortius Nears Endgame as CEO Accelerates Profitability Goals

CEO Mohit Joshi has advanced the company’s 15% operating margin target by a full year to March 2025, aiming to accelerate the turnaround of India’s fifth-largest IT services firm. The push comes as Tech Mahindra lags larger peers in revenue growth and enters the final phase of Project Fortius, its three-year margin improvement roadmap. Joshi’s strategy hinges on tighter cost control, higher billing rates, reduced bench time, and AI-driven productivity. Margin Goal Acceleration - Original target: 15% margin by March 2027; revised to March 2025. - Joshi urged 300+ senior executives in a December townhall to meet the new timeline. - Current operating margin: 12.1% as of Q2FY26, up from 11.2% YoY. Strategic Levers for Margin Expansion - Higher billing rates during project renewals to boost top-line. - Reduced bench time: now down to ~90 days, improving billable utilization. - AI training and delivery simplification to enhance operational efficiency. - Portfolio pruning and pyramid rationalization also underway. Revenue Growth Challenges - Growth has not exceeded 2% in any of the last six quarters. - Revenue contracted in two of the last six quarters and in FY25 overall. - Needs $3.1 billion in H2FY26 to match FY25 revenue of $6.26 billion. Project Fortius Nears Completion - Launched in April 2021, aimed at margin uplift through organic growth. - Focus on scaling top 80 accounts and exiting low-margin clients. - Final phase now underway with sharper execution targets. Analyst Views and Outlook - Kotak Institutional Equities sees Joshi’s strategy as viable, noting TechM’s unique margin headroom. - Phil Fersht (HFS Research) cautions that success depends on benign demand and disciplined execution. - Q3FY26 results due 16 January, will be key to validating progress.