‘Dotcombust, Lehmancrisis were far worse than current challenges’

It has been four months since Rostow Ravanan, took over as MD & CEO of Mindtree from KK Natarajan. Ravanan, who was the CFO of Mindtree believes that the company can hit the billion dollar mark by end of 2018 fiscal (in March 2016, it had revenues of $700 million), driven by momentum in renewing existing and new business. He spoke to BusinessLine on the kind of challenges that mid-sized companies face in the backdrop of global business volatility, which resulted in a weak first quarter and a soft guidance for the next quarter and how they different sets of challenges facing the Indian IT sector.

Q: What are the things you are working on since you took over as CEO?

Starting from January we met our largest customers and one of the things that was striking is the amount of goodwill our company commands in the market. There are a lot of exciting shifts happening in the market. There is a noticeable change as market is evolving, along with technology and clients are getting sophisticated in the way they approach outsourcing deals. Every week, two large customers are visiting us and it is resulting in new ideas and some kind of differentiated offering.

Q: Any new challenges since you have taken over?

A: Internally, not much of a challenge. The Board and employees have strongly rallied behind me. Externally, challenges are coming from the global economy. Who would have thought that something like Brexit would happen. It has confused clients and in some cases have resulted in delay in project ramp ups.

Then there is the US elections, which, suddenly has become 'noisy'. However, the industry as well as Mindtree has faced these challenges in the past.

One of the areas where we need to work is in creating a balance when it comes to acquisitions. Magna360, one of our acquisitions is doing extremely well whereas Blue Fin (another acquired company) has had some challenges, mainly due to what's happening in UK.

Q: Is the current challenge the biggest faced by the Indian IT sector?

A: I would not put it that way. When you are in the midst of a storm, one always feels that it is the worst one. Dotcom bust or the Lehman crisis were far worse than this. At the same time, there are lots of interesting things happening, like automation and cloud computing which was not the case in the past. Also, the world is better prepared to face volatility. Corporates are sitting on large cash piles and financial institutions are more stable now. The only challenge is in the event of a larger economic slowdown, with all the money spent on companies, with interest rates zero, how much stimulus is good remains the question.

Q: What about broader challenges such as impact of automation on jobs? It seems more in favour of employers than employees.

A: I would flip the argument. When cars came in horse carriages faced a similar dilemma but look at the way the transportation sector has grown. Apply the same logic to the construction sector and look at the advancements in roads, efficiency in construction that has resulted due to it. The thing to understand is that employees cannot adopt a 'one time learning' policy for the rest of their working lives. Ultimately, we have an opportunity to triple our marketshare from $160 billion to $500 billion.

Q: How does your digital business look?

A: It grew 5.2 per cent, continuing to grow over the last few quarters and had a 47.8 per cent growth year-over-year. We won $93 million worth of 'digital' deals in the June-ended quarter. Looking at our current run rate, we confident hitting the $1 billion mark in revenues by FY18.