'Our growth in banking, financial services, and insurance (BFSI) is a prime example.'
LTIMindtree's second-quarter (Q2) results for 2024-25 (FY25) showed broad-based growth across verticals and markets, unlike some of its larger peers.
The company also closed a $200 million deal in the manufacturing sector.
Debashis Chatterjee, chief executive officer and managing director, discusses with Shivani Shinde/Business Standard via video call what worked for the company, the benefits of the combined forces of LTI and Mindtree, and how clients are ramping up artificial intelligence (AI) deals.
Q2 has seen broad-based growth for the company. What is working for LTIMindtree?
We had indicated in the first quarter that we expected this momentum to continue in Q2, and that's how it played out.
The key aspect of Q2 growth is its broad-based nature, spanning across all industry verticals in which we operate.
Much of the growth has come from deals focused on cost optimisation and vendor consolidation, occurring despite discretionary spending not opening up.
Several factors are working in our favour: First, as LTIMindtree, we have secured a place at the table for large deals.
Our growth in banking, financial services, and insurance (BFSI) is a prime example.
There are two scenarios: one where we are incumbents, and clients have opted for vendor consolidation, which has benefited us, and the other where we previously weren't invited but now have a seat at the table, often competing as new partners against existing incumbents.
We've won deals in both situations, largely due to clients' confidence in our capabilities as a unified entity. This is the biggest positive for me.
Second, we were historically strong in discretionary spending. Over the past 15 months, we've built robust capabilities to address efficiency deals.
Recently, our focus has been solely on such deals, enabling us to win on both efficiency and discretionary fronts.
Third, the large deals we've secured are ramping up.
Fourth, the AI and generative AI (GenAI) segment is also proving beneficial. We are working with over 40 of our top 100 clients, with some projects already in production.
We're also collaborating with clients on various data and AI initiatives, yielding very good results.
Do you see this momentum continuing into the third quarter (Q3) and beyond?
The pipeline remains robust, and many deals are nearing final decisions, with ongoing projects ramping up. Overall, deal activity is strong.
However, Q3 comes with its own seasonality -- fewer working days and furloughs.
Given this, we are cautiously optimistic about maintaining momentum through Q3.
On a macro level, we are still bullish about how things have picked up.
Last year's furloughs were unprecedented. I don't think we'll see them to the same extent this time, which is a positive sign for us.
How are AI and GenAI deals shaping up for the company?
Our approach to AI revolves around three pillars: AI for Everything, Everything for AI, and AI for Everyone.
We are proactively exploring how we can integrate AI into our current and future operations. In ongoing deals, we strategically infuse AI.
Under Everything for AI, as clients scale their AI initiatives, they need changes to infrastructure, data, and the use of large language models, which we facilitate.
The third pillar, AI for Everyone, focuses on training our workforce to embrace AI.
Nearly 63 per cent of our workforce has completed an AI course, and we aim to reach 100 per cent.
However, revenue from AI continues to be small.
We don't specify revenue figures from AI, but our focus is on how we address issues among our top 100 clients and the meaningful outcomes we achieve.
Currently, we're working with over 40 clients in this space, and the number is steadily increasing.
I don't usually discuss deal sizes because almost every deal we handle now includes an AI component.
It may be a small portion, but AI is integral to defining large deals.
The $200 million deal we won has an AI element baked in, and we wouldn't have secured it without a strategic infusion of AI.
Has the US Federal Reserve (Fed) rate cut affected clients' decision-making or spending sentiment?
Our US clients seem to be waiting for the elections to be over. We haven't seen any immediate impact from the Fed rate cut within our portfolio.
In the BFSI segment, there is a lot of work driven by regulation and compliance that clients are keen to address.
While one could argue that this is discretionary, overall, discretionary spending hasn't returned in a big way.
Feature Presentation: Aslam Hunani/Rediff.com
