Will beat Nasscom's growth projections of 11-14%: Mindtree

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Will beat Nasscom's growth projections of 11-14%: Mindtree

Industry body National Association of Software and Services Companies (Nasscom) foresees an annual growth of 11-14% in FY13 for the Indian IT industry. However, MindTree is certain that it will beat Nasscom’s projections.

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Industry body National Association of Software and Services Companies (Nasscom) foresees an annual growth of 11-14% in FY13 for the Indian IT industry. However, MindTree is certain that it will beat Nasscom's projections.

"We are highly confident that we will do better than 11-14%," Rostow Ravanan, chief financial officer, MindTree told CNBC-TV18.

Despite tough economic situations in Europe and the US, Mindtree has not seen project cancellations or budget cuts from its clients in that region. "Most of our customers indicate that their budgets are flat with small growth of 1-2%," he added.

Europe has been a very strong growth for Mindtree area over the last couple of years. Its growth in Europe was up 23.5% in the last quarter. Ravanan expects to do well in Europe ahead.

"Many of our customers are in countries like Netherlands, Germany, Belgium, etc, who are currently not affected by the crisis," he said.

Below is the edited transcript of Ravanan's interview with CNBC-TV18. Also watch the accompanying video.

Q: Are you expecting FY12 to be an extremely challenging year?

A: FY12 is pretty much coming to an end. Year to date December, we grew 22% compared to year to date last year. We are maintaining a strong growth momentum. We believe this is amongst the best growth at least in the top 4-5 within the Indian IT industry. We have always grown higher than the industry average. We will maintain that momentum into FY13 as well.

Q: For calendar year 2012 you may have had conversations with your clients. Are you getting a sense that there could be a pressure both on volumes and billing considering the tough times in Europe and US?

A: It is unlikely as of now that nobody is currently planning it to be a tough year. There are uncertainties. My guess is, customers have postponed some of their discretionary spending kind of projects to the later half of this year. But all our customers are feeling that what we currently have, the momentum on that will continue.

Some of the newer initiatives may get started in April, May or June. Little bit of growth can be back ended, but none of our customers are pressing the panic button. As of now there are no delays or cancellations. While there are uncertainties, we don't believe that there is anything majorly wrong for calendar year 2012.

Q: Is there any slight downward reversion in terms of budgets that you are noticing and if so what are the sectors that you are noticing?

A: As of now most of our customers indicate that their budgets are probably flat with small growth of 1-2%. None of our customers currently seem to indicate any budget reductions compared to CY11. Little bit of budget may be back ended, so they may not start new initiatives in the early part of this year. Some of the new initiatives could possibly get deferred to the second half of this year.

Many of them are mainly concerned about the environment external to their own businesses. Within their business, they believe that revenue momentum is strong; profit margins and cash balances are decent. So, they are not worried about their individual businesses, their concern is on the external environment. Therefore, they are turning little conservative or cautious because of that external environment. But nobody is currently indicating that budgets are getting cut.