‘Q1 sets tone for growth’
Mindtree reported a TCV (total contract value) of $504 million in Q1, the first time it has crossed half a billion. DEBASHIS CHATTERJEE, chief executive officer and managing director, Mindtree, in an interview with Shivani Shinde talks about the growth drivers, the company’s 4x4x4 strategy, and rising attrition. Edited excerpts:
What have been some of the key drivers for this quarter? And how much of this growth is attributable to the 4x4x4 strategy announced by you a few quarters back?
This is a good start for the financial year, because Q1 sets the tone for growth. This is also the third quarter of over 5 per cent sequential growth. The most important aspect of this quarter was it had been broad-based, and across verticals and geographies. We had come out with the 4x4x4 strategy, and one of the points was to stay focused on which industries we want to play in, which geographies and what the service lines are. We are aggressively executing this strategy and it is reflected in the order books. Moreover, our service lines are aligned to the demand coming from areas such as cloud, etc.
Your travel and hospitality sector has also seen doubledigit growth. Is it back to prepandemic levels?
Travel was 17 per cent of Mindtree’s revenue prepandemic, but this vertical was impacted in a big way. The base of this vertical in revenue contribution has come down. We, however, stayed close with the clients, so though our revenue came down we did not lose any clients. Now as some of them redesign their operating models, we become their natural partner in business transformation. Travel has rather grown 10 per cent sequentially in the last three quarters. But this still does not give us a peek into when this sector stabilises. We are cautiously watching it.
One of the focus areas of the 4x4x4 strategy was the firm’s foray into health care vertical. How is that playing out?
The strategy has been rolled out and is now well-entrenched in the company. We have a good pipeline in health care, we have a team, and leaders are in place. There were two reasons why we forayed into health care; one is that some of the existing clients are entering the adjacent areas of health care. And two, we feel as disruption happens in health care, the disruptors will need to have good capability in cloud, digital transformation and so we decided to get into it. Since we are seeing a good pipeline we started calling out the numbers as well.
How does the NXT acquisition help Mindtree?
NXT is into IOT and industry 4.0 capability, which they have implemented across L&T. The reason why we acquired it was because IOT and Industry 4.0 are becoming very critical for manufacturing and some other verticals. This has further been accelerated due to pandemic. By acquiring this capability, we can take this to many of our clients. This helps us to address demand from many of our existing client base.