technology

Mindtree sees opportunity for NxT Digital acquisition across verticals


Pune: Mid-sized IT firm Ltd. expects to see significant growth in the NxT Digital business, acquired from parent company Larsen & Toubro Ltd., with the potential to extend the offerings to other industries as well.

In May, Mindtree
announced that it was acquiring NxT Digital, which would help augment its offerings in the Internet of Things (IoT) space. The acquisition
was completed on July 2.

“NxT is all about connected products and connected ecosystems, which have been successfully implemented within the L&T Group. We saw an opportunity to take this to our manufacturing clients, who are accelerating their digital transformation and also to new clients,” Mindtree CEO Debashis Chatterjee said. “The reason we are excited about this is that it has got a huge opportunity not only in manufacturing but also in industries like retail and CPG (consumer packaged goods).”

Retail, consumer products and manufacturing together comprise about 22% of the company’s revenue, and the vertical grew by 6.8% in the quarter ended June 30, 2021.

Chatterjee had undertaken the process of rationalising the total number of clients Mindtree works with when he had
taken over as chief executive officer in 2019. The total number of active clients fell to 260 at the end of the June quarter from 290 a year ago. Mindtree had over 340 clients at the time of Chatterjee’s appointment.

Chatterjee said the company had slowed down on this process over the past year on account of the pandemic.

“That process is ongoing and that I think there is still room for rationalisation, and again from a stats perspective, we have rationalised almost 150 accounts over the last two years, which means that I am able to focus more in terms of my strategy,” he said.

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He added that the company would continue the process in a way that it doesn’t cause any disruption to existing clients. While there was no fixed target, the company would continue to go after more strategic deals where it had greater potential to cross-sell services.

Mindtree has now
carved out healthcare as an independent vertical given the potential in the space. Several of the company’s existing clients are showing interest in the vertical, he said.

“Healthcare presents a great opportunity and that’s why we have been incubating this over the last several quarters, we have been building out the leadership. There are areas within our sweet spot. Most of the disruption is happening in the areas of customer service, data insights and cloud. And these are areas we are pretty strong in as they are aligned to the service line strategy we have,” Chatterjee said. “While it’s early days, the company has signed on clients and reallocated some existing clients to this vertical.”



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