<p>Mid-tier IT services company Mindtree posted another quarter of strong performance in Q2 of FY22. Amid a strong demand environment, the company has a robust deal pipeline, reflecting better growth prospects in the coming quarters. In a conversation with <span class="bold">Debasis Mohapatra</span>, the company’s CEO & MD, <span class="bold">Debashis Chatterjee </span>said the pricing environment remains stable and the company may command a better price for new contracts. He also said that the IT firm is aggressively hiring fresh graduates to tide over the supply side challenges.</p>.<p>Excerpts:</p>.<p class="Question"><strong>Mindtree posted another strong set of quarterly numbers amid a strong demand environment. Is this sustainable beyond FY22?</strong></p>.<p>In terms of the portfolio of clients that we manage, we feel that the demand pipeline is very robust not only from the existing clients but also from the new clients that we are acquiring. So, the demand environment is very good. We will get a little bit finer details in terms of how spending will open up once the budgeting session starts. At a broader level, we see very good demand. </p>.<p class="Question"><strong>What is the average tenure of deals that Mindtree is getting? How does the deal pipeline look like?</strong></p>.<p>I think you have to understand the kind of things we do. If you see the kind of projects we do, there are four service lines. If you take customer success, data and cloud; these are the service lines wherein we tend to do a lot of project types of deals. In some cases, we are the digital transformation partner for the client for a longer duration. Whereas in the case of Enterprise IT, that is more in terms of efficiency, infrastructure app moving into the cloud and a lot of mainframe modernisation kind of things. So, the first three service lines are more discretionary (spend), while the last one is more cost takeout. In terms of average deal tenure, in some cases, we are digital partners wherein one digital project gets over and we get another. In other cases, we call out the average tenure of the deal. So, it is difficult to say a tenure given the complexity of projects we execute.</p>.<p class="Question"><strong>Usually, the third quarter (October-December) is a soft quarter for Indian IT services players. But, given the strong growth in the travel and hospitality segment across the world, will it be different for Mindtree?</strong></p>.<p>In Q3, there is seasonality in terms of holidays. But if you look at the last four quarters, we have seen nice momentum. Especially, travel & hospitality is growing for consecutive four quarters where we have grown double-digit sequentially. We have already reached the revenues of the pre-pandemic levels.</p>.<p class="Question"><strong>How is the overall pricing environment? Are you getting a price hike from new deals or during renewals?</strong></p>.<p>There are a couple of ways to look at it. One is when you are signing a new engagement, you will always see if you can command a better price. That is part of the ongoing sales process. The important thing is not only to look at pricing but the ability to structure the deal. At a broad level, we have seen the pricing environment remains stable.</p>.<p class="Question"><strong>How are you managing the supply side challenges given the talent war in the Indian IT industry? </strong></p>.<p>Hiring is at an all-time high. We have hired a lot of freshers as well which we never did before. There are also a lot of initiatives being taken towards talent engagement. We’re hiring about 1,000 freshers per quarter and depending on demand, this is likely to continue.</p>
<p>Mid-tier IT services company Mindtree posted another quarter of strong performance in Q2 of FY22. Amid a strong demand environment, the company has a robust deal pipeline, reflecting better growth prospects in the coming quarters. In a conversation with <span class="bold">Debasis Mohapatra</span>, the company’s CEO & MD, <span class="bold">Debashis Chatterjee </span>said the pricing environment remains stable and the company may command a better price for new contracts. He also said that the IT firm is aggressively hiring fresh graduates to tide over the supply side challenges.</p>.<p>Excerpts:</p>.<p class="Question"><strong>Mindtree posted another strong set of quarterly numbers amid a strong demand environment. Is this sustainable beyond FY22?</strong></p>.<p>In terms of the portfolio of clients that we manage, we feel that the demand pipeline is very robust not only from the existing clients but also from the new clients that we are acquiring. So, the demand environment is very good. We will get a little bit finer details in terms of how spending will open up once the budgeting session starts. At a broader level, we see very good demand. </p>.<p class="Question"><strong>What is the average tenure of deals that Mindtree is getting? How does the deal pipeline look like?</strong></p>.<p>I think you have to understand the kind of things we do. If you see the kind of projects we do, there are four service lines. If you take customer success, data and cloud; these are the service lines wherein we tend to do a lot of project types of deals. In some cases, we are the digital transformation partner for the client for a longer duration. Whereas in the case of Enterprise IT, that is more in terms of efficiency, infrastructure app moving into the cloud and a lot of mainframe modernisation kind of things. So, the first three service lines are more discretionary (spend), while the last one is more cost takeout. In terms of average deal tenure, in some cases, we are digital partners wherein one digital project gets over and we get another. In other cases, we call out the average tenure of the deal. So, it is difficult to say a tenure given the complexity of projects we execute.</p>.<p class="Question"><strong>Usually, the third quarter (October-December) is a soft quarter for Indian IT services players. But, given the strong growth in the travel and hospitality segment across the world, will it be different for Mindtree?</strong></p>.<p>In Q3, there is seasonality in terms of holidays. But if you look at the last four quarters, we have seen nice momentum. Especially, travel & hospitality is growing for consecutive four quarters where we have grown double-digit sequentially. We have already reached the revenues of the pre-pandemic levels.</p>.<p class="Question"><strong>How is the overall pricing environment? Are you getting a price hike from new deals or during renewals?</strong></p>.<p>There are a couple of ways to look at it. One is when you are signing a new engagement, you will always see if you can command a better price. That is part of the ongoing sales process. The important thing is not only to look at pricing but the ability to structure the deal. At a broad level, we have seen the pricing environment remains stable.</p>.<p class="Question"><strong>How are you managing the supply side challenges given the talent war in the Indian IT industry? </strong></p>.<p>Hiring is at an all-time high. We have hired a lot of freshers as well which we never did before. There are also a lot of initiatives being taken towards talent engagement. We’re hiring about 1,000 freshers per quarter and depending on demand, this is likely to continue.</p>