MindTree eyes larger deals

Expects a couple of $50-mn clients in a year, aims revenue of $1 bn by 2016

Mid-sized information technology (IT) services company MindTree, which aims to record revenue of $1 billion by 2016, says it is ready to participate in larger contracts and hopes to bag clients that provide annual revenue of $50 million.

Currently, the Bangalore-based company does not have any $50-million client. The company’s largest client contributes about $20 million in revenue a year, about seven per cent of the company’s overall revenue.

Speaking to Business Standard, Managing Director and Chief Executive Officer Krishnakumar Natarajan said, “If we look at the scenario 12 months ago, we would not have thought of a $50-million customer. But based on the current trends and growth, we are confident within four to five quarters, we would have one or two $50-million customers.”

Recently, the company had formed a dedicated team to focus on scouting for deals worth $25 million or more. The team is headed by Greg Blount, senior vice-president & head of US strategic accounts and former partner of TPI, an outsourcing advisory firm. It also has former senior TCS executive Jack Benton, responsible for third-party advisory and analyst relations. Currently, the team is 10-member strong and largely focuses on the US market.

“We have not won any deal in this range, but were in the second position for a deal bagged by a global player. With the new team in place, we are getting calls for participating in deals this range. About five deals are in the pipeline,” said Natarajan.

With the new team and strategy in place, MindTree plans to increase the share of its top clients in the overall revenue. Currently, its top 10 clients account for about 39.4 per cent of the revenue, while the average revenue per customer for IT services is about $2.2 million.

Natarajan says the company is focusing on contracts due for renewal this year, as clients would seek service providers with specialisation in certain domains.

“In the current environment, clients are looking for specialised deals, and deal sizes are getting smaller. We are a specialised player in certain domains, and want to leverage the opportunity,” he said. According to TPI, about 700 contracts would be due for renewal this year, against 530 last year.

Meanwhile, MindTree is expected to complete its rebranding initiative in 8-10 weeks. The company had earlier hired global branding firm Siegel & Gale for this initiative. “We want to create a company that is driven by expertise, culture and employees. For this, rebranding is the key, and we are in the final stages of the process,” said Natarajan.