New Mindtree CEO after L&T takeover to join on August 1; focus on improving profitability

Mindtree Director SN Subrahmanyan in an investor call said that the new CEO of the company who had already been chosen will be joining the organisation on the August 1.  He added that an announcement will be made the following day. According to industry sources, Cognizant Digital Systems & Technology head, Debashis Chatterjee is in the forefront of being named the next CEO of Mindtree. His term at Cognizant will come to an end on July 31.

Addressing investors and analysts for the first time after the completion of takeover by L&T and induction of new board members, Subrahmanyan said that the few clients that he met have given them a positive feedback and welcomed the takeover by L&T.

"We are confident of the growth in 2019, some deals that were deferred are gaining momentum in Q2" he said. Subrahmanyan, who is optimistic about improving profitability of the company which has been a pain point, said that they foresee improvement on that front on a year-on-year basis excluding any one-off or revenue headwinds.

Though Mindtree has had peer revenue, what the company needs to focus lacked direction. To achieve the same the new management has already spoken to senior employees, addressed town halls and are also in the process of meeting some of the clients to put across the new management's point of view after which decisions on improving other aspects will be taken, Subrahmanyan added.

While L&T currently does not intent to increase shareholding to 66 per cent as originally mentioned in the open offer, Subrahmanyan said the current shareholding brings full protection to Mindtree against any future destabilisation of the management. He added that as such, the management can concentrate on growth and can reap benefits of L&T's global connections.

Speaking on client concerns post take over, Subrahmanyan said, "Mr Naik, Chairman of L&T group has written to each and every client of Mindtree to assure them full cooperation as well as the benefit of services and L&T group's overall balance sheet". The few clients who have replied have given a very positive feedback he added.

While maintaining that there is no overarching overlaps between L&T Infotech and Mindtree, barring the BFSI sector, Subrahmanyan said that the client profile still remains very divergent. However, without giving a timeline, he said that when both the companies become big enough it could be possible or even a requirement to combine certain aspects of the business.

Indicating that the companies could look at a joint bidding on overlapping areas of business, Subrahmanyan said, "We will combine the services of Mindtree and LTI as A+B and bid for it." It is a model that L&T uses as a conglomerate when other businesses of the company encounter such a scenario.

Also read: BT Buzz: As L&T acquires 60%, what lies ahead for Mindtree and its founders

Also read: Mindtree now under the bigger tree of L&T, says CEO Subrahmanyan at the AGM