L&T Infotech, L&T Grpup's IT services subsidiary which crossed the $500-million revenue mark this year, is working towards achieving another milestone — $1 billion in revenue. Sudip Banerjee, CEO of L&T Infotech, who has led the company for the last two and half years, claims the numbers game doesn't bother him much. In an interview with Bibhu Ranjan Mishra, Banerjee discusses the past, present and the road ahead for the company. Edited excerpts:
here were reports of L&T planning to hive off its IT since it has not grown according to expectations? Your comments?
People report things without understanding what has been said. L&T said the group would be reconstituted into nine independent lines of business (LoBs). The idea was to make those businesses independent, with independent CEOs and Board of Directors, and they would also report financials. The purpose was at some point of time, these LoBs can be spun off into independent listed entities. As far as L&T Infotech is concerned, it is already a subsidiary -- so there will be no change. We may, some time, go for a listing which is already known.
But people say L&T feels since you failed to acquire Satyam, the desired growth has not been achieved.
It is not a fact at all. Satyam is an old story. We have demonstrated our intent (of inorganic growth strategy) by acquiring a Canadian company (Citigroup's Canadian IT outsourcing arm, Citigroup Fund Services Canada) about six weeks ago. In the current year, we have grown exceptionally well -- more than 30 per cent. With the acquisition of the Canadian firm, we will have excellent growth next year again.
Are you waiting to reach any particular revenue mark before listing the company?
In the current financial year, our revenue will be about $525 million (Rs 2,400 crore). We had a plan for an IPO, but we have to shelve it because of the recession. Now, even though we are coming out of the recession, the market is very volatile. We will certainly go for listing when the market is good.
Do you regret not being able to acquire Satyam?
Actually, in retrospect, I believe everything turns out for the better. We got a lot of publicity and mileage. A lot of people got to know about us and people also understood our intent of acquisition. Also, our existing customers understood how serious our parent company was in helping us grow. Whoever got it (Satyam), good luck to them – everyone knows, it is not a smooth ride.
What is your plan for expanding your foortprint, globally as well as in India?
Currently, our employee strength is 14,300. We operate out of five locations in India — Mumbai, Pune, Bangalore, Chennai and Mysore. In the last six months, we have started three new global centres– Belfast in Northern Ireland, Singapore and Dubai. In the previous year, we had started a centre in Edison, New Jersey, which has become quite big now. We also have two centres in the US– one on the East Coast and one on the West Coast. We will keep on opening more centres based on business demands.
Any particular vision that the company has in mind?
The first milestone to be achieved was $500-million revenue, which we achieved this year. The next target is how quickly we can double our growth in the next three years. We are always setting targets for ourselves. Unfortunately, we lost one year (FY09-10) because of the recession.
What are the new practices you have introduced to achieve the new target?
Earlier, we were only a software company. In the last couple of years, we have made a lot of effort to build up our service line capability. We are also looking after independent testing services, infrastructure management services, business processing services and IT consulting services. In the software business, we now have a separate practice focusing on business intelligence and data warehousing, enterprise application and integration. These are the growth drivers for the future.
What types of deals are being discussed at the moment what is the conversion rate?
We are pursuing many integrated deals, including building applications, testing and providing infrastructure management services. In many cases, these are for large global roll-outs, with a multi-country element. In some cases, we are being offered opportunities when businesses approach us for renewal of their existing contracts. Typically, deal renewals happen every three to five year.