‘If you don’t grow faster than your peers, you’re in trouble’

Giriprakash K V Bengaluru | Updated on April 25, 2019 Published on April 25, 2019

Rostow Ravanan, CEO and MD, Mindtree

In the midst of a takeover battle, Mindtree reached a milestone which had been eluding it for a long time. The $1-billion revenue target which it had set and reset a few times earlier has now been finally achieved. Mindtree CEO and MD, Rostow Ravanan, shares the company’s future plans, and the status of the acquisition move by L&T. Excerpts:

MindTree has finally crossed the $1-billion mark. What is the next target, and when will it be achieved?

Obviously, the next target is $2 billion. After that, maybe $4 billion. In our business, if you don’t grow faster than the others in the industry, all kinds of problems crop up.

Our excitement comes from the fact that so far we have continued to grow faster than the industry, and we want to maintain that track record. We got to the $1-billion mark much faster than our peers did. We are hoping that the next billion comes very, very fast.

What are the learnings during the company’s journey to the $1-billion mark?

As long as you have a strategy relevant to the needs of the market, it will help capture the sort of growth opportunity that exists. We can say there is an enormous amount of demand potential, but to capture it, you have to make investments.

One learning was on how to anticipate the industry trends ahead of others, and make those commitments. So when clients are looking for solutions in certain areas, Mindtree is at the top of the list.

The second learning was on the people’s side. How do you address their concerns about the fast-changing skill equations and enable employees to learn new skills on a continuous basis?

Also, reaction times to market place changes have to be very, very quick.

What will it take to get you positioned among the top five IT companies in India?

Why would we want to even do that? From our point of view, trying to chase scale or size is not a priority for us at all. More than being mid-tier, we call ourselves as a specialised, expertise-driven company. In our minds, our customers already count us a Tier-I company, and as a transformational partner. In that sense, we are slightly dancing to a different tune. We have specialised offerings and we stay out of many verticals. We are not present in energy utilities, telecom and healthcare.

For us, it is important to continually go deeper and deeper. In our minds, we are not second to anybody. Others may do things differently, which may be better for them.

When we look at the large players, their size is also not giving them any inherent advantage. Our success is because of all the differentiation that we bring to the table compared to what they do.

Was the special dividend announced recently meant to keep L&T off?

Not really. For all practical purposes, the special dividend is subject to AGM approval and the AGM is in July. It can’t influence the L&T offer. The open offer will be from the middle of May to the end of May and this AGM is after one whole month. We thought achieving such an important milestone of crossing $1 billion in revenues should be celebrated. Hence, we decided to give a special dividend to our shareholders.

Are you looking at an acquisition yourself?

Not right now. We don’t have a preference on either buying or not buying. It will depend on the analysis we do on the portfolio. If it makes sense, and there is a cultural fit, we will buy it. If it doesn’t, we will continue to build our business organically.

We understand that the CEO of L&T invited all the co-founders for a dinner date...

No. We haven’t got an invitation till now. We haven’t even met them, though at some point in time, we will have to sit across the table and figure out what their plans are and what they want.

Is it now a reality that L&T eventually will have a large stake in Mindtree?

I have no idea. If it was a reality, they should have done it by now. My shareholders’ list doesn’t show L&T today. Tomorrow, if it changes, we will deal with it. We don’t want to prejudge or assume anything at this stage. The board is handling that issue. We are saying that we have done something good and hence someone is willing to spend $1.5-2 billion to buy us without any due diligence. Our focus is on how to do continue doing well. The minute we take our eyes off our business, all this becomes a non-issue.

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Published on April 25, 2019
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