LTIMindtree Embraces AI for Enhanced Client Engagement and Growth

AI as a Revenue Driver

LTIMindtree, recognized as India’s sixth-largest IT service provider with annual revenues of $4.4 billion, is leveraging artificial intelligence (AI) to enhance productivity and create new business opportunities. Debashis Chatterjee, the company’s CEO and Managing Director, shared insights with ET about the burgeoning role of AI in client relationships.

Proactive Client Engagement

“AI is becoming real, or rather has become real,” Chatterjee said. The company is aggressively infusing AI across its operations, seeking to pass productivity benefits to top clients. Chatterjee emphasized the proactive approach they are taking to convey these advantages to clients, stating that this strategy will drive further business opportunities.

Adaptation and Revenue Shifts

During a recent Q3 report, the company noted a 5.7% sequential decline in its hi-tech vertical due to the transfer of AI-driven productivity gains to their leading client. However, Chatterjee remains optimistic about the potential revenue growth that could follow from this strategic pivot.

Looking Ahead

“This phenomenon of passing on productivity gains will extend into the next quarter,” Chatterjee commented. He also highlighted the company’s focus on creating new market opportunities alongside managing current revenue dynamics.

Focus on AI Adoption

Currently, 60 out of LTIMindtree’s top 100 clients are engaging with AI technologies, and Chatterjee aims to extend these capabilities to all 100 clients. The company is particularly enthusiastic about agentic AI, actively pursuing over 40 conversations in this area that could lead to increased revenues.

The Merger’s Vision

Formed from the merger of L&T Infotech and Mindtree in November 2022, LTIMindtree outlined a vision to reach $10 billion in revenue in the coming years. The company recently reported a revenue increase of 5.6% year-on-year (YoY) and 1.1% sequentially, although net profit experienced an 8.8% YoY decline due to rising costs and reduced margins.

Record Order Inflow

In a positive turn, LTIMindtree achieved its highest-ever order inflow of $1.68 billion, marking a 29% increase from Q2 and a 12% jump from the previous year. This includes substantial deals across manufacturing and the banking, financial services, and insurance (BFSI) sectors.

Growth in BFSI Sector

Chatterjee identified BFSI as a vertical witnessing discrete returns. While the sector has not seen a complete recovery in discretionary spending, he anticipates a resurgence of investment in this area as economic conditions stabilize.

Market Sentiment

“Market sentiments are focused on returns from investments made in cloud and AI since Covid,” Chatterjee observed. He believes regulatory business within BFSI could prompt clients to increase spending, positioning LTIMindtree to capitalize on these opportunities.

Revenue Breakdown

BFSI currently accounts for 36.4% of LTIMindtree’s total revenues, with a substantial 74% derived from the North American market.

Employee Expansion

The company is also making strategic hiring moves, having added 2,362 employees—including 1,400 fresh graduates—from October to December. This expansion aligns with their goal of maintaining a utilization rate above 85% while leveraging AI.

AI Orientation of Workforce

Chatterjee indicated that nearly 100% of their workforce is now trained in AI applications, ensuring employees understand how to harness AI for their roles and its broader impact on the business.

Conclusion

LTIMindtree is strategically positioning itself to not only weather the current market challenges but also to thrive through innovative AI integration. With a focus on client engagement and operational efficiency, the company is set to embrace growth in the evolving landscape of IT services.