‘Good growth headroom for both Mindtree & LTI’
SANJAY JALONA, CEO and MD of LTI (erstwhile L&T Infotech), will complete six years at the helm of the company. Since he led the firm to a successful listing in 2016, the company’s stock price has gone up 6.7x. In an interview with Shivani Shinde, he talks about growth momentum, Shoshin approach to hiring and more. Edited excerpts:
Q1 results reported a strong growth momentum. How do you see the fiscal year panning out?
This was our best-ever Q1 since we got listed and the growth was best in q-o-q terms. The good thing about this growth is that it was holistic and across parameters. Traditionally, we have seen growth a bit soft in verticals like insurance, energy and utility, but even those have done well. We added 23 new logos, and revenue from large accounts grew well. Our confidence comes from Q1 exit, conversation with customers, the work that is in the pipeline and robust demand. We have added over 4,000 people between Q4FY21 and Q1FY22.
How are you making sure that LTI continues to capture the growth due to the cloud and digital transformation?
We believe that this is an era of digital restructuring. If three years back you asked me about remote workforce, I would have laughed and said the industry will perish. But look around and every industry has been restructured. And the one thing that is binding this together is technology. I cannot crystal gaze, but for at least the next 7-8 years, there is enough and more in terms of tech services. Earlier, there would be this one company that would lead in technology adoption or shift, and others would follow. Now, if you do not accept this shift, you will disappear.
…so what is LTI doing to keep up with this shift?
There are two things that are important in our business: one, you need to know the business of your customers and hence you need to have a sharp vertical focus. Six years back when I joined this company, we got out of several verticals and decided to get a sharp focus on a few sectors. Second, awareness on new technology. We bet very early on Snowflake, a data warehousing services provider. Last year, they had the largest IPO in the US, but more importantly they recently made us their Elite Service partner globally. There are several such examples. Third, we make sure our staff are on a continuous path of learning.
In short, we want to be paranoid all the time, and keep looking for newer things, keep an appetite for risk and for failure. I have incorporated the Shoshin-jain-buddhism philosophy of a “beginners mind” within the company.
“I CANNOT CRYSTALGAZE, BUT FOR AT LEAST THE NEXT 7-8 YEARS, THERE IS ENOUGH AND MORE IN TERMS OF TECH SERVICES”
You are a part of L&T conglomerate that has two other tech firms, one is into services (Mindtree) and the other into tech. Do we see them coming together or are there synergies that can be built on?
L&T has been a very supportive parent group for us. They have various IT services companies in their portfolio. IT companies and LTTS cater to two different markets and have been in this space for 20 years. Mindtree and LTI are both doing well, and the headroom for growth is also good. We complement each other, there is a good place where we can collaborate too. Only time will tell if there is a need for these to merge.
Majority deals now are digital first, which also means they are getting smaller. Does it mean more competition?
Our business has always been hyper competitive. At least 8590 per cent of our business will be where the largest global SI’S or India GSI’S will also have presence. We are used to competing for the mindshare of the customer. We reduced our presence from some of the sectors and started to focus on fewer things. We invested in building a dream team which co-creates with customers. LTI’S culture is now customercentric... We have acquired seven companies and these are all small tuck-in acquisitions where the largest one for us would have been $15-20 million in revenue. We are not into headline grabbing M&AS for just taking up revenue. We have to build capability that creates differentiation.
How much of the demandsupply scenario bothers you?
Attrition has spiked, for this quarter it was 15.2 per cent for us. It’s in line with what we see in the market. More than the attrition, the bigger challenge is the talent pool.