Mid-tier IT services company Mindtree says full recovery in travel several quarters away

Pune | Bengaluru: Mid-tier IT services provider Mindtree said it was seeing green shoots in the travel and hospitality sector, but the industry’s recovery from the impact of the Covid-19 outbreak could take several quarters.

Before the pandemic, the vertical contributed about 18 per cent to the L&T group firm’s revenues.

“We have not lost any clients and are closely connected with them on any initiatives that are under way,” said Debashis Chatterjee, CEO of Mindtree.

As global lockdowns brought the industry to a standstill, revenues from this segment dropped by more than 50 per cent over the previous quarter. The travel, transport, logistics and hospitality vertical, however, grew 11 per cent in the July-September quarter, largely on smaller projects that clients were undertaking.

Customers were spending on modernising their workplaces and conserving cash currently, Chatterjee said, adding they were also looking to re-imagine the business model.

“Contactless is the main thing going forward and they are thinking differently on how they can re-imagine the business model. So, some dollars are going towards that as well,” he said.

Recovery would largely depend on how long it takes for domestic and international air travel to resume and operate normally.

Mindtree recently rejigged its strategy to focus on four key verticals and four service lines in four geographies.

Chatterjee said the 4x4x4 strategy was working well, with the company signing a mix of transformation deals and smaller projects over the last few months. It is also beginning to witness an acceleration in spending on Cloud, with technology and consumer goods companies among the quick movers in this space.

“At an overall level, it is more of the cost take-out and then some discretionary spends are going into generating more revenue for clients,” he said.

There is significant traction in the consumer goods space as companies realise that ecommerce and an omnichannel model is the future and are investing in this sector.

There will be bigger opportunities as companies transition enterprise applications to the Cloud. With Cloud becoming mainstream, migration of applications and infrastructure is emerging as another growth driver.

“Various clients are doing various aspects of it at different levels and accelerating it. Because Cloud has become mainstream, all other opportunities and digital transformation is happening around it,” Chatterjee said.


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