Post its takeover of Mindtree, Larsen & Toubro’s CEO and managing director S.N. Subrahmanyan opened his maiden address to the IT firm’s shareholders here on Tuesday with a ‘warm pat’ on the shoulders of founders and promoters.
Mindtree was a modern-day start-up with an unique culture and has evolved into an institution in its own right, he said, adding, “full compliments to the founders/promoters of Mindtree, all first-generation entrepreneurs, for creating a billion-dollar revenue business, earning over $100 million in profit and 40% return on capital from scratch in 20 years.”
To allay concerns over ‘cultural misfit,’ he said, much like Mindtree, L&T was also a venture started by founder-managers and had successfully transitioned into a well-respected, high-performing, professionally-managed company.
Addressing the Mindtree shareholders at its crucial AGM, he said, L&T would focus on ‘continuity’ as a key theme in management transition and continue to run and grow the business of Mindtree independently.
Mindtree would continue to have its independent management, unique culture and committed ‘Mindtree minds,’ he said.
“We believe L&T, with its experience and track record of managing two very successful IT businesses, can add value to Mindtree and its stakeholders.”
Mindtree will be kept distinct from L&T Infotech (LTI), L&T Technology Services (LTTS) and the recently-formed business division, L&T-Nxt.
‘Minimum overlap’
LTI offers services to banking, finance, manufacturing, oil and gas, media and healthcare sectors, while Mindtree’s clients are in CPG, retail, hospitality, communication and high-tech. They operate in different areas, with minimum client overlap, he explained.
“L&T can provide further impetus to the long-term growth of Mindtree by way of board-level oversight and relevant client connects. We will be able to harness these relationships for the benefit of Mindtree’s stakeholders.”
Further reassuring shareholders, employees and clients of Mindtree, Mr. Subrahmanyan said: “Let me assure [you], that the management will be focussed on doing everything possible to keep the services being rendered to various clients at its best.”We will strive to provide new age technologies, services, digital and content in an ever more increasing manner to take the organisation forward.
Later responding to shareholder queries and comments, he said, “Mindtree won’t be snatched away and in fact it is now part of a bigger tree called L&T.”
To investors who asked whether L&T would agree to the ₹27 dividend Mindtree had announced for its 20th anniversary, he said: “We have always been fully supportive of the dividend.” He also said that there were no plans to delist Mindtree and its head office would continue to be in Bengaluru.