AI Won’t Save Everything’: Tech Mahindra CEO Slams 80% Productivity Promise as a ‘Dangerous Fantasy’

Mohit Joshi says overpromising AI gains could derail IT firms and hurt employees; pushes for sustainable, margin-focused growth instead

When CEOs start promising 80% productivity boosts from AI within five years, Tech Mahindra chief Mohit Joshi says it’s time to hit the brakes. Hard.

In an interview with ETtech, Joshi didn’t mince words. “That’s not ambition—that’s fantasy,” he said. “You could end up wrecking your margins, burning out your teams, and chasing a future that simply doesn’t exist.”

At a time when India’s top IT firms are under pressure to deliver AI-fueled growth, Joshi’s caution stands out. But to him, it’s basic math and common sense.

IT giants are feeling the heat—and AI is a double-edged sword

There’s a growing trend among global IT service providers: woo clients with flashy AI pitches, promise huge efficiency gains, and undercut competition by offering lower-cost contracts thanks to “productivity automation.”

But Joshi isn’t buying it.

He warns that betting on 70–80% productivity jumps in such a short window could lead companies to overcommit and underdeliver. “It’s a huge effort that no one is budgeting for,” he said.

Behind this push, there’s a deeper issue: AI is cannibalizing traditional revenues. Routine coding, testing, and support tasks—once a core revenue stream—are being automated. So firms are trying to squeeze value from fewer people and leaner teams. Joshi believes this is short-sighted.

The ‘growth at any cost’ mindset has consequences

“We’re not going to get into the ‘growth at any price’ game,” Joshi said bluntly.

Many rivals, he added, are doing just that—sacrificing margins or slashing compensation to meet unrealistic client demands. That could mean cutting variable pay, halting bonuses, or freezing hiring even as workloads climb.

“We don’t want to do wrong by employees,” Joshi said. “This industry is powered by people, not promises.”

It’s a bold stance in an environment where the pressure to prove AI gains is relentless. But Joshi believes slow, sustainable progress trumps flashy narratives.

Leadership churn? Not exactly, says Joshi

With any strategic shift comes turnover. And Joshi’s tenure since January 2024 hasn’t been without noise.

But he pushed back on reports of a “senior exodus.” According to him, what’s happening is more of a strategic reconfiguration than a mass departure.

Out of the core team, only one senior executive—Abhishek Shankar—left voluntarily. Others like Ram Ramachandran and Abid Mirza have moved into new roles inside the Mahindra Group. Vikram Nair retired from Tech Mahindra and then took another position within the parent firm.

Joshi pointed out that in the past year alone, they’ve added new roles that didn’t even exist before:

• Chief Operating Officer

• Chief Transformation Officer

• Chief Technology Officer

• Head of Consulting

“If you just look at exits and not entries, you miss the full picture,” he added.

A three-point game plan for stability and growth

Since stepping in, Joshi has focused on building Tech Mahindra’s growth on three pillars—each equally weighted: revenue, margins, and culture.

Margins, in particular, have been a hot topic. The company is targeting a 15% EBIT margin and 30% ROCE by FY27. That’s not easy in today’s economy, where tech deals are smaller and clients more cautious.

Still, Joshi believes the groundwork has been laid. FY26 is expected to be a pivot year where top-line growth finally picks up.

And how?

• Operational discipline: tighter project controls, better forecasting
• Talent rebalancing: hiring specialists over generalists, especially in AI and cloud
• Smarter dealmaking: targeting profitable, long-term contracts over vanity logos

In other words, play the long game—even if it’s less flashy.

AI is here to stay—but it needs a leash

Joshi isn’t anti-AI. Far from it. He sees it as a seismic shift—just not a miracle drug.

Tech Mahindra has ramped up its AI investments and client offerings. But Joshi says they’re focusing on measurable, step-by-step productivity gains—not overnight transformation.

That includes process automation, GenAI pilots, and deep cloud integrations—especially in sectors like telecom and banking where the company already has strong roots.

Still, the narrative needs fixing.

“AI is the biggest theme we’ve seen since dotcom,” Joshi said. “But let’s not make the same mistakes. Remember how that ended.”

The bigger picture: margins before magic

India’s $245-billion IT industry is at a crossroads. Top firms like Infosys, Wipro, and TCS are grappling with shrinking contracts, cautious clients, and a tech workforce in flux.

In this landscape, AI is both a beacon and a bludgeon.

It promises efficiency, but also demands clarity—and that’s what Joshi is asking for. Not slogans or moonshots, but math that checks out.

Here’s where Tech Mahindra’s roadmap sits today:

So far, the numbers are trending upward—but slowly. And that’s just fine by Joshi.

“The hype will settle,” he said. “What’ll matter is who stayed disciplined when everyone else was chasing dreams.”