‘We added a significant number of freshers in Q1. You will see a good number of hiring in Q2 as well.’
Photograph: Kind courtesy LTIMindtree/Instagram
For LTIMindtree, the first quarter performance for FY25 came in stronger at 5 per cent year-on-year (Y-o-Y).
Importantly, the company’s revenue from banking, financial services and insurance (BFSI) grew 2.9 per cent sequentially, and the US, which has been slow for several large peers, was up 6.4 per cent Y-o-Y and 4.4 per cent sequentially.
Debashis Chatterjee, chief executive officer and managing director of LTIMindtree, in a video interview with Shivani Shinde/Business Standard after the results, talks about the growth drivers.
You said that some of the clients are kicking off investments in high-priority transformation. Can you elaborate on the nature of these deals?
We do see some green shoots and whatever we have seen so far, in terms of our client portfolio…, we are very confident that the momentum we have developed in Q1 will continue in Q2.
But it is still too early for us to call out anything with respect to the H2 of this financial year.
There are two segments of spends by clients. First, we see that some of the clients are definitely getting ready for AI and GenAI, and other spends.
When you say AI/GenAI, you need to be ready with data digitisation and a certain infrastructure… so when we say transformative projects, these are from clients who are getting their environment ready for AI.
Two, some clients, which were running projects earlier but had put them on hold, are now getting revived.
For instance, in BFSI from a regulatory point, projects are getting ramped up as they need to meet the compliance requirement… this is driving the demand in Q1 and Q2.
What is driving growth for your clients?
At a broader level, there are three distinct aspects. These include deals that were delayed and are getting ramped up. Two there is some level of vendor consolidation.
And finally, our ability to sign more master services agreement (MSAs). This is driving the growth and giving us the confidence that the momentum that we have seen in Q1 will be maintained in Q2.
If you are sure of growth momentum for Q2, why not call out for the financial year as well?
Our Q3 is the fourth quarter for the client, and in this quarter, there are furloughs. And one cannot predict furloughs.
That is the reason we are not calling out on growth.
Also, at the overall macro level, nothing has changed significantly. What we are talking about is something we anticipated and it happened.
The discretionary spends are not yet happening, only the high-priority projects have begun.
With discretionary spends not back and a slow Q3, it will not be fair on our part to get ahead of us.
While the US grew well in this quarter, rest of the world was down 7.5 per cent.
Is the company looking at reducing its exposure to the US and also how are you making sure that other geographies also grow?
We have to capture the opportunities wherever it exists. The US as a market is moving fairly well. We are also planting seeds in other markets.
Our joint venture with Aramco is an example.
We expect significant growth once this JV is operational.
We have opened centres in Brazil, China and Riyadh. All of these are part of plans to de-risk from the US.
We are doing these things with the view that over a period of time we want to fire on all cylinders as far as the other geographies are concerned.
What about the Indian market?
We have very strategic work being done for clients in India. And we will continue to be selective when it comes to the India market.
We work with several GCCs (global capability centers) here and will continue to pursue that.
Growth is coming back slowly, what about hiring plans?
We added a significant number of freshers in Q1. We will continue to hire. You will see a good number of hiring in Q2 as well. But it’s difficult to call out targets.
If you have seen the utilization numbers, we have kept the hiring engine absolutely alert and ready, and strengthened that engine as well.
Feature Presentation: Aslam Hunani/Rediff.com
