LTIMindtree has commenced fiscal year 2025 with a mixed performance in its first quarter ending on 30 June 2024. The company recorded a revenue of Rs 9,142.6 crore, a 2.8 per cent increase quarter-on-quarter (QoQ) and a 5.1 per cent growth year-on-year (YoY). However, net profit stood at Rs 1,135.1 crore, a sequential rise of 3.1 percent but a decline of 1.5 per cent compared to the corresponding period last year. In an interview with BW Businessworld’s Rohit Chintapali, LTIMindtree COO and Whole-time Director Nachiket Deshpande discusses the strategic role of AI, stressing its integration in every service offering, deal renewal, competitive proposition and more. Excerpts:
What initiatives or changes is S. N. Subrahmanyan (SNS) pushing as the new chairman, since he has taken over from AM Naik?
He was the vice chairman of the board for a long time. So, from that perspective, he has been always involved, and continues to guide us in our strategy and our execution as well. In a way, nothing much changed. Of course, it was a smooth transition, just like what you have seen across the board at the L&T group. AM Naik and him have planned it across many years, one after another, in a very systematic manner.
In Q1 performance, TMT and BFSI led the growth this quarter. Could you tell us about this progress and the green shoots of recovery you mentioned during the press conference?
We are seeing the growth across all three of our key sectors BFS, tech and services and manufacturing. Within this grouping, BFS and tech and services have led the growth. In terms of the quantum, the growth for us has been all around. It is across the entire customer base within each of these sectors.
BFS and tech have been driven by two phenomena. Firstly, we have been on the right side of vendor consolidation initiatives in some of the Fortune 500, Fortune 1000 customers in these two sectors, and hence benefited from that demand instead of being distributed across many vendors coming to us as one of the preferred partners for them. Secondly, there is a lot of modernisation demand that was sort of put on pause over for the last two to three quarters which is starting to unlock as all of these customers are getting ready for their enterprise-wide AI adoptions. And for AI adoption to be effective, they need to complete some of these modernisation and the core modernisation and platform-work within their enterprises for that.
There has been considerable comments from IT service players about AI and generative AI driving growth during results announcements. In my conversation with DC, it was clear that AI is integral to most deals now, however, it’s hard to quantify AI’s contribution. What is your perception of this, and how do you view your pipeline compared to peers such as TCS or Infosys?
We see AI playing out in three ways: ‘AI for Everything,’ “Everything for AI,’ and ‘AI for Everyone.’ ‘AI for Everything’ means reimagining every service, process, and system with AI at the centre, embedding it in every service offering and deal renewal, making us a preferred vendor for consolidation initiatives. ‘Everything for AI’ involves participating in the entire value chain needed for enterprises to adopt AI, from infrastructure to data governance and model explainability, requiring a platform-centric approach with security and responsibility guardrails. ‘AI for Everyone’ focuses on persona-centric productivity, ensuring every role, from software developers to CFOs, becomes more productive with AI-driven solutions.
Q1 TCV came in flat at USD 1.4 billion and you saw improved TCV conversion to revenue, are you satisfied?
Some deals in the final stages were pushed to Q2, impacting this quarter’s TCV. Additionally, modernisation demand, which does not contract as large multi-year TCV deals, will only appear in TCV once billing starts and not as we win it. Hence, we would not say that the TCV is a complete reflection of the growth that we see coming into Q2. That is why we called out that we feel comfortable with where it is at this point in time.
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