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We are now in the big league post merger, says LTIMindtree COO

‘LTIMindtree was now looking at delivering a billion dollars of revenue synergies over the next few years and enhancement of 200 basis points of profit margin synergies subsequently’

January 23, 2023 09:05 pm | Updated January 26, 2023 10:11 am IST - MUMBAI

Customers were now more cautious about ROI on investments and there was sharper scrutiny, says Nachiket Deshpande, whole time director & COO, LTIMindtree.

Customers were now more cautious about ROI on investments and there was sharper scrutiny, says Nachiket Deshpande, whole time director & COO, LTIMindtree. | Photo Credit: Jaishankar P.

LTIMindtree is already in the big league of Indian IT services players providing global technology consulting and digital solutions, COO and whole time director Nachiket Deshpande said in an interview.

“We are already in the big league of Tier 1 IT service providers and competing with the giants such as TCS, Infosys and Cognizant in 8 out of 10 deals. We have the size, scale and complementary offerings now as part of our integrated offering to global clients,” he said.

Last week, the company declared the first-ever combined Q3 results post the merger, Mr. Deshpande said adding they would complete their journey of integration in CY23 and become a growth leader in the industry segments where they operate.

“The highlights of Q3FY23 performance give us a significant presence in the big league of Tier 1 peers as per size and revenues and we can now take this strength to our global client base,” pointed out Mr. Deshpande, adding, “Another significant development is that our BFSI services portfolio is now more than $1 billion (as of 9MFY23) giving us the fifth-largest ranking in financial services among our Indian peer group.”

“The insurance core platform business and the products platform crossed the significant $100-million revenues milestone,” he added.

He said that LTIMindtree was now looking at delivering a billion dollars of revenue synergies over the next few years and enhancement of 200 basis points of profit margin synergies subsequently.

Stating that the profit margins in Q3 were impacted due to various factors, Mr. Deshpande said, “As we go into Q4, we see 200 to 230 basis points coming back and by Q4FY23 we shall be able to return to the same margin that both cos. were individually delivering before the merger.”

Claiming that the first phase of integration is completed, Mr. Deshpande said that the second phase of integrated system strategy would be completed in Q4FY23.

“The new organisational structure and client facing team structure is now in place and by end of March 2023, we shall migrate to one stack system as a combined company,”he said.

On hiring plans, Mr. Deshpande refused to give any specific numbers but said that their hiring plan was linked to business growth.

“It continues to be the same for each company as what it was prior to merger, he said.

He added that as the budgets for clients were still getting finalised, LTIMIndtree would continue to fine tune hiring on a dynamic basis as the situation evolves.

When asked about the impending recession in the U.S. and Europe, the company’s biggest markets, Mr Deshpande said that in terms of their clients, there was boardroom caution, wait-’n’-watch stance and some apprehension around how things pans out.

“However, none of our clients have cancelled their transformation programme or any significant projects. Even at Davos, there is no consensus about whether recession will happen and whether the global economy will have a soft landing or hard one,” he said.

However, Mr. Deshpande said that customers were now more cautious about ROI on investments and there was sharper scrutiny herein.

“The discretionary spends and digital transformation journey of the last 2-3 years will continue but clients will focus on new cost-efficiency opportunities and then redeploy their efforts and budgets therein. For us, opportunities will see new shape and will mix of cost efficiencies and digital transformation,” he said.

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