Mindtree pitch for larger contracts finds takers

Mindtree, the mid-sized information technology services company, said its strategy to pitch for large contracts had started to show early signs of success.

The Bangalore-based company has been invited to participate in seven contracts, each with a total value of $20-100 million, as a precursor to bidding for such contracts. These are multi-year projects, mostly deals coming for renewal and some fresh ones, spread across North America and Europe, its managing director and chief executive officer, Krishnakumar Natarajan, told Business Standard.

“Typically, in the early stages, clients invite 10-12 bidders, including known and regional players. Earlier, we were not in this list and, thus, never used to get invited for such contracts,” Natarajan said. “Though we had the capability, we knew the contracting process and how they (these deals) get executed. Our ability to present ourselves to large clients is more pronounced in recent days.”

In the second quarter of this financial year, Mindtree had formed a team to scout for deals worth $25 million or more. It is headed by Greg Blount, senior vice-president & head of US strategic accounts, and former partner of TPI, an outsourcing advisory company.

“The team is now helping us get access to some of these large contracts for which we were not being invited earlier,” said Natarajan.

Presently, Mindtree’s largest client gives it an annualised revenue of $36-40 million. During the quarter ended December 31, 2012, the company increased the number of its $5-million customers to 21 from 17, and the number of $10-million customers from eight to nine. Revenue contribution from the top 10 clients has gone up three percentage points to about 47.1 per cent during the past 12 months.

In the third quarter of FY13, Mindtree reported a 63 increase in net profit at Rs 98.8 crore when compared to the same period last year. Revenue in the quarter was Rs 590.1 crore, a growth of 13.5 per cent when compared to the corresponding period last year.

Natarajan said the deal pipeline for calendar year 2012 was looking much healthier than it used to be about a year before. “Twelve months ago, there were concerns among customers and they were not taking decisions. Clearly, this year, we are seeing far more positive traction in the market,” he added.