'AI is playing critical role in LTIMindtree success'

'Our AI strategy -- AI in Everything, Everything for AI, and AI for Everyone -- is now in action.'

Debashis Chatterjee, chief executive officer and managing director of LTIMindtree, said that the company's artificial intelligence (AI) strategy -- AI in Everything, Everything for AI, and AI for Everyone -- is delivering results for both the firm and its clients.

In a video interview with Shivani Shinde/Business Standard following the company's 2024-25 (FY25) third-quarter (Q3) results, he shared insights on the outlook for 2025-26 (FY26), the role of AI in efficiency-driven deals, and the state of discretionary spending.

Based on your Q3 performance, do you think the fourth quarter (Q4) and FY26 look better?

The growth momentum we built in the first, second, and third quarters gives us confidence that we can sustain this in Q4 as well.

We had a record order intake this quarter of $1.6 billion, which is the highest in the company's history.

We also have a good book-to-build ratio of 1.5. Given these factors, we feel that FY26 should be better than FY25.

In fact, in this quarter, all five of our verticals grew year-on-year, except for technology and media.

The company is passing on some of the productivity gains in Q3. Do you think this will continue in Q4 as well?

Our top client is at the forefront of AI and is a visionary in this space. When working with them, we have consciously passed on certain productivity benefits, which resulted in a slight revenue decline from this client.

We also mentioned that the impact of these productivity gains in Q3 will carry over into Q4.

However, this is a strategic move. By passing on productivity gains, we strengthen our client relationships, gain mindshare, and ultimately secure a greater market share in the long run.

While there may be a short-term dip, this approach will drive future growth.

With a high order intake, have things changed at the ground level, and do you think this momentum will sustain?

I believe order intake should be evaluated on an annual basis rather than quarterly.

While Q3's order intake was strong, we are confident that Q4 will surpass last year's figures.

For the past 24 months, discretionary spending has been on pause, and we have yet to see a broad-based recovery, except in the banking and financial services sector.

A 24-month pause is unprecedented, but we are hopeful that discussions around discretionary spending will resume across other sectors, particularly as we enter the next financial year (FY26).

The orders we secured in Q3 and the second quarter were largely driven by vendor consolidation and cost optimisation, rather than discretionary spending.

AI is playing a critical role in our success, as we aggressively integrate it into all our solutions.

Our AI strategy -- AI in Everything, Everything for AI, and AI for Everyone -- is now in action.

Is there a way you can quantify AI deals?

Quantifying AI deals is a bit difficult. But some of the things we are monitoring are that almost 100 per cent of the workforce has gone through the fundamentals of AI orientation.

What we are also measuring is whether we are talking about AI with our top 100 clients.

That is happening; we are moving very aggressively. With more than 60 clients, we are having conversations about AI.

We have also invested in agentic AI. We recently announced an investment in a startup called voicing AI.

We are already having conversations with more than 40 clients on the potential opportunities for leveraging agentic AI.

Do you think discretionary spending will come back in Q4?

I think the priority for clients continues to be cost takeout and efficiency.

Especially with generative AI coming into play, clients have realised that there will be some low-hanging fruit within their portfolios that they can focus on in terms of cost takeouts.

So, I think cost takeout as a theme is going to stay for some time.

Secondly, discretionary spending will have some impact on the uncertain market, but discretionary spending is also a factor of the portfolio of clients you have.

It could be different in our case. As of now, we have not seen a broad-based comeback, but I am hoping that after a pause of 24 months, and now with a new government in place, discretionary spending may come back as we get into FY26.

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