Mid-tier IT services company MindTree expects its domestic business to grow to 10% of total revenue in the next 18-24 months backed by strong demand from the government sector and increased spending by large Indian companies. Domestic business, which has grown 50% in the last six quarters, currently contributes 6% to the company's total revenue. “We see this chunk growing in the next two years as we witness more governmnet spending and large implementation from the Indian multinationals in the domestic market,” said Anjan Lahiri, president and chief executive, IT services, MindTree.
The Rs 1,233-crore IT solutions company, which bagged a multi-year contract from Aadhaar, a government identification programme, is hopeful of getting more such government contracts going forward. “Unique identification (UID) has a lot of adjacent projects happening and we are trying for that,” said Lahiri. “We want to capitalise on our UID project expertise and infrastructure. There are very large government projects, but we are not looking at it. We rather focus on our expertise and areas like public distribution system and financial inclusion. Being part of the UID project gives us an upper hand in those verticals,” he added.
MindTree, which witnessed a healthy growth in the last two quarters, sees an uptick in the IT spending going forward. The company expects BFSI and manufacturing as the two leading verticals in the coming quarter.
Last quarter in terms of revenue growth, the company had a strong quarter with IT services leading the way, posting a 12.9% growth sequentially, while the quarter before had a 8.5% growth rate. Overall, for MindTree, manufacturing is the largest business unit, contributing about 26% to the total revenue. BFSI contributes 23% of the total revenue and telecom adds another 23%, while other sectors form the rest.
For the IT services firm, in terms of business, the US contributes 63%, while Europe is about 19%. “In the coming quarters we see very significant growth from Europe. Our UK, Netherlands and Switzerland business is doing very well. We expect business from Europe to reach 25% in the coming years,” said Lahiri.
“Currently we are not looking at expanding our footprint in Europe. We need to become deeper rather than broader,” he added.