San­jay Jalona, CEO & MD, L&T, dis­cusses the fi­nan­cial per­for­mance of his or­gan­i­sa­tion for the year 2018-2019

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What is your view of the per­for­mance so far of the In­dian ICT in­dus­try in 2019? The In­dian ICT in­dus­try con­tin­ues to evolve in a pro­gres­sive way. De­spite of the fis­cal start­ing on a cau­tious note, key play­ers in the in­dus­try have reg­is­tered a steady growth rate. The year brought in a lot of op­por­tu­ni­ties. We saw al­most en­tire in­dus­try em­brac­ing dig­i­tal tech­nolo­gies. Ad­di­tion­ally, the sec­tor con­tin­ues to be among the top sec­tors from a job cre­ation and hir­ing per­spec­tive thus con­tribut­ing to na­tion’s de­vel­op­ment goals.

Over­all, I feel the IT sec­tor is poised for fu­ture growth, with tech­nol­ogy be­ing the key en­abler for this growth. The dig­i­tal op­por­tu­nity is huge. So, while the com­pe­ti­tion will re­main in­tense, a well-gov­erned com­pany will see good sus­tain­able growth with con­tin­u­ous in­no­va­tion.

What is your view on FY 19 in terms of busi­ness and fi­nan­cial per­for­mance? Please share any two key highlights?

LTI con­tin­ued its ro­bust growth jour­ney in FY 2018-19. The broad-based growth in­volved all key ver­ti­cals in­clud­ing the BFSI sec­tor – a do­main where peers had wit­nessed slow down.

We at­tribute the stel­lar growth to four key strate­gic dif­fer­en­ti­a­tion: • Op­er­at­ing to trans­form for our clients • As­sum­ing the role of data driven or­gan­i­sa­tion en­abler • Fo­cus­ing on en­rich­ing end-user ex­pe­ri­ence for our clients • Digi­tis­ing the core to mod­ernise the busi­ness in­tel­li­gence frame­work of clients In terms of quan­ti­fied fig­ures, the fol­low­ing are the full year FY19 highlights that even­tu­ally re­sulted in LTI record­ing one of the best growth rates in the in­dus­try: In US Dol­lars: • Rev­enue at USD 1,349.1 mil­lion; growth of 19.1% YoY • Con­stant Currency Rev­enue growth of 20.9% YoY In In­dian Ru­pees: • Rev­enue at Rs. 94,458 mil­lion; growth at 29.3% YoY • Net Income at Rs. 15,155 mil­lion; Net Income growth at 36.2% YoY

What is the way ahead in an en­vi­ron­ment of de­clin­ing mar­gins, softer IT spending and tighter out­sourc­ing, and GDPR regime, in the tra­di­tional ver­ti­cals?

LTI re­mains well pre­pared to counter the bar­ri­ers to growth, if any. We have a well-di­ver­si­fied port­fo­lio across in­dus­tries, re­gions and ser­vices. This cou­pled with our rich-her­itage which gives us un­par­al­leled do­main un­der­stand­ing and will­ing­ness to go the ex­tra mile for clients dif­fer­en­ti­ates us.

On the mar­gins front, we have been very trans­par­ent and com­mit­ted in con­vey­ing that we will de­liver sta­ble mar­gins– a pa­ram­e­ter which we have con­sis­tently de­liv­ered over the last three years since list­ing. More­over, our growth has been broad-based with all key ver­ti­cals of busi­ness fo­cus reg­is­ter­ing healthy rise – both on a YoY as well as a QoQ com­par­i­son.

LTI’s dig­i­tal ser­vices trac­tion is one of the high­est in the in­dus­try. The large deals trac­tion too has picked pace since last year. Thus, our be­lief is that there is am­ple growth op­por­tu­nity for the best fit and right so­lu­tions ad­dress­ing the mar­ket and client needs.

What is your busi­ness out­look for FY 20, and what are the key fo­cus ar­eas?

We are con­fi­dent of con­tin­u­ing our in­dus­try lead­ing growth mo­men­tum to re­tain our po­si­tion in the leader’s quad­rant. In terms of mar­gin guid­ance, we are com­mit­ted to de­liver sta­ble mar­gins in fu­ture.

At LTI, we be­lieve the fu­ture of ev­ery in­dus­try lies at the con­ver­gence of phys­i­cal and dig­i­tal worlds, and we con­tinue to in­vest in build­ing ca­pa­bil­i­ties that our clients will re­quire to nav­i­gate this trans­for­ma­tion. We be­lieve that this ap­proach en­sures a wider scope of rel­e­vance and hence po­ten­tial for growth.

Ad­di­tion­ally, we will con­tinue to evolve to serve as best fit tech­nol­ogy part­ner for break­away en­ter­pris­esen­ter­prises that be­lieve in carv­ing out dif­fer­en­ti­a­tion ba­sis the fol­low­ing:

We are con­fi­dent of con­tin­u­ing our in­dus­try lead­ing growth mo­men­tum to re­tain our po­si­tion in the leader’s quad­rant. In terms of mar­gin guid­ance, we are com­mit­ted to de­liver sta­ble mar­gins in fu­ture

En­abling new busi­ness mod­els

• Cloud only, mo­bile only • Di­rect to cus­tomer • En­abling tech for the bot­tom bil­lion

En­abling rev­enue growth

• Us­ing as-a-ser­vice mod­els • Faster time-to-mar­ket • Cus­tomer on­board­ing

Trans­form­ing cus­tomer & em­ployee ex­pe­ri­ences

• En­abling dig­i­tal ways of work­ing • Seam­less col­lab­o­ra­tion • Pro­vid­ing in­no­va­tive ser­vices

Mas­ter­ing next-gen ef­fi­cient op­er­a­tions

• Ex­treme sim­pli­fi­ca­tion • Us­ing open source so­lu­tions

What is the in­flu­ence of the emerg­ing tech­nolo­gies? How will it im­pact the next cou­ple of years?

We have wit­nessed enor­mous tech­nol­ogy dis­rup­tion dur­ing the last year. En­ter­prises of var­i­ous scales are vi­va­ciously em­brac­ing dig­i­tal tech­nolo­gies. Cut­ting edge emerg­ing tech­nolo­gies such as AI, IoT, AR, VR, and ma­chine learn­ing are pro­gres­sively be­com­ing main­stream, cut­ting across in­dus­tries. These tech­nolo­gies are of­fer­ing abun­dant new op­por­tu­ni­ties and en­abling large en­ter­prises as much as they are fu­el­ing in­no­va­tion for the start-ups in de­vel­op­ing new prod­ucts and ser­vice lines, im­prov­ing ef­fi­ciency, pro­duc­tiv­ity, and com­pe­tence lev­els. Blockchain, for in­stance was orig­i­nally con­sid­ered as a tech dis­rup­tion only in fi­nan­cial ser­vices and re­tail. How­ever, it is now be­ing heav­ily lever­aged across health­care, gov­er­nance, lo­gis­tics, etc.

While open­ing up a plethora of op­por­tu­ni­ties, these tech­nol­ogy dis­rup­tions are also cre­at­ing a need for en­hanc­ing skillset of IT pro­fes­sion­als. The tal­ent re­quire­ments for the new op­por­tu­ni­ties cre­ated by emerg­ing tech­nolo­gies are dif­fer­ent from that of the past. To mon­e­tise the op­por­tu­nity, all IT play­ers will have to make in­ter­ven­tions in form of up­skilling and reskilling.

Over­all, we be­lieve the fu­ture con­tin­ues to look bright for the In­dian IT-ITeS in­dus­try; all thanks to the power of these emerg­ing tech­nolo­gies and the op­por­tu­ni­ties it con­tin­ues to cre­ate.

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