LTIMindtree CEO Debasis Chatterjee says deal delays consistent across all business sectors

economictimes.indiatimes.com:

LTIMindtree in the June quarter, helping explain its underwhelming revenue and profit scorecard despite an encouraging order pipeline, but CEO Debasis Chatterjee believes stronger offshoring demand undergirded by cost efficiencies helped expand operating margins at the newest member of the elite Nifty 50 club. “We expected quite a few deals to close in Q1, but (those) got dragged into Q2,” Chatterjee told ET.

“The decision making process- there has been consistent delays across all the sectors.” India’s sixth largest IT firm said it was witnessing delayed decision making and hiring freeze from clients’ side despite a “robust” deal pipeline. It reported the total contract value of deal wins at $1.41 billion compared with $1.35 billion last quarter, with a large focus on cost-efficiency deals.Also read | LTIMindtree’s Q1 net profit up 4% to Rs 1,152 crore, misses Street estimates The uncertainty due to the weak macroeconomic situation is causing a lag between IT sector deal wins and the subsequent conversion of those engagements into revenue.

Clients are often delaying employee onboarding or investments into projects, said Indian IT powerhouses announcing their first-quarter results last week. “Many of the cost takeout and efficiency deals that we are chasing right now- offshore can work really well with it and we are getting the advantage of that,” said Chatterjee.

The company is still seeing transformation deals as well as discretionary spends, but they are funded by savings from cost efficiency objectives. “We are very well positioned to have capability on both sides of the spectrum -to save cost and also help the clients in discretionary spending in terms of some new experience programmes led by transformation and