Rostow Ravanan, who took over as the Chief Executive Officer and Managing Director of Mindtree in April, said that the company expected to hit the one billion-dollar revenue mark by the end of the fiscal FY18. The company, which ended FY17 with $715 million in revenues and witnessed a weak first quarter this fiscal, is now targeting large deals.
Edited excerpts.
After a strong performance in the last couple of quarters, Q1 witnessed a dip in profit. Is that a major worry?
I would say that this is just a seasonal impact, primarily due to the higher cost of visas in Q1. The second reason was that two customers of Bluefin cancelled projects in May. (In 2015, Mindtree had acquired Bluefin, a consultancy specialising in SAP HANA, an e-commerce platform.) While announcing our Q4 results itself we had stated that the year will have a slow start. With the deals we have signed and ramp-ups we are seeing, our belief is that the year, as a whole, will be a very strong one. For the next three to four years , we have a strategy is place and things are panning out well. We don’t see any long-term problems.
A significant part of your business comes from the U.K. and Europe. How do you see the impact of Brexit?
At the moment there are no major knee-jerk reactions. Many of our clients feel they need not make any immediate changes because of the economic situation in Europe. Nobody is cancelling projects nor are they starting anything new. The separation is a very complicated issue and we have to watch out for the next step. One impact that is inevitable is the cross currency impact, and the pound has dropped almost about 10 per cent compared with the dollar. We have a large presence in London and have offices across Europe. Our plans are stable and we are continuing to add more people in those geographies.
In the current macroeconomic scenario, are you looking at entering new emerging markets for growth?
We are very conscious about not making any geographical expansion at the moment. We don’t have any presence in Africa and have no plans for South America. However, we have presence in other markets like Singapore and the Middle East. In these geographies, we may selectively look for new customers. Our main orientation is to serve our global clients in those markets rather than growing domestically. There is so much of demand and opportunities in our current segments and geographies. We want to stay focused on things we are doing.
Do you now participate in deal sizes exceeding $50 mn?
In the case of our existing customers, we have been considered for all their deals and for some specialised services as well. We are able to get a share of their total spending on IT. With new customers, we are increasingly getting invited for large deals worth $50 million dollars or $100 million. I think it is only a matter of time that we win a few large deals. Three or four years ago, we did not have such conversations, but now we are being called for quite a few. If we win a couple of major deals, then we will get a momentum and can win more such. So, a lot of effort is being put in this direction.
When do you expect to touch the $1-billion mark?
We are confident that we will grow above the industry average this year and if we proceed at this pace, we will hit the billion-dollar revenue by the end of the next financial year. We want to reach that goal.
Do you think automation will reduce job opportunities?
I believe that all industries have gone through technological evolution and when it happens, we need different skills. People need to update themselves and learn new skills.
With new trends, I don’t think there will be an aggregate number of job losers or reduction in the industry.
