Mindtree rejigs strategy, to focus on large accounts

Mindtree Ltd has refreshed its overall strategy forming four service lines as it pushes for a larger pie of the market.

In an interaction with BusinessLine, Mindtree CEO & MD Debashis Chatterjee said the company had during the course of the quarter “looked at the markets, geographies, verticals we operate in and consulted some of our clients before identifying the verticals and the markets Mindtree want to operate in,” he said.

The result of the exercise was setting up of four service lines, which are not new service lines, but existing lines bundled into four boxes to take the offerings in a much more focused manner to clients. These are customer success, data and intelligence, cloud and enterprise IT. “We want to drive the growth through the top 20, 30 clients and continue to rationalise the long tail, Chatterjee said. He also pointed out that the refresh strategy had nothing to do with the pandemic.

During an investors’ call, Mindtree had said that the worst impact of Covid-19 was largely behind. It hinted that 2QFY21 should be better than 1QFY21.

Chatterjee said the company has the aspiration as well as the confidence to deal with big clients. “We are putting more energy in the existing accounts and are not in favour of having a long tail of accounts and have been putting the right people for large accounts.”

Retain identity

Analysts have often talked about a possible merger between L&T Infotech and Mindtree, both subsidiaries of L&T and how it can shake up the pecking order among the top five domestic IT Services’ companies. But Chatterjee said, “The mandate has been very clear to operate as an independent entity. There could be specific opportunities and the power of the two companies could be used in specific deals.”

Chatterjee, the first CEO of Mindtree after the promoters of the company left following its acquisition by L&T, said that communication, media, technology and consumer packaged goods will pick up pace faster than the others.

Digital channel

He was confident that while the company’s exposure to retail is limited, it will stay close to its clients and “we believe most of the retailers will quickly adapt to e-commerce and digital channel,” he said. While sectors such as travel and hospitality may be soft now but once they bounce back, the company would be ready to help its clients to rebuild their businesses.

“The four service lines we keep talking about will come in handy for us. In fact, every deal we have announced is actually led by some of these service lines. All these service lines have a significant digital component. Suppose, we do a deal on data and cloud, the logical extension could be modernising the enterprise IT, which also gives us a significant ability to cross-sell and upsell.”

Chatterjee said the pandemic has forced clients to fast-track the move towards digital. “Clients who have been delaying the decision, are sure to accelerate. We are very bullish on how the IT will play out with digital being the core of the businesses of clients. But the things are still not stable. The pandemic is far from over. It will not the first one or the last one for sure,” Chatterjee pointed out.

He said clients are accelerating their digital journey and want to migrate to the cloud sooner than later. “We are helping them to take out costs. They are looking at workplace modernisation. Right now conversations have been happening in pockets but will pick up over a period of time. They are looking at new business models like contactless travel. They are trying to rethink their own models and we believe we will have opportunities there.”