Demand robust, but second wave a concern: LTTS CEO Amit Chadha

Last time, between March and June, we were getting cancellation notices. Oil and gas prices, and airlines had tumbled down. So we got notices from (industries like) aerospace, oil and gas, and automotive in large parts. Then it stopped.

This time around, knock on wood, demand is back. I mean demand is gangbusters at this stage in most parts. Demand is back in the market in the US and Europe, especially for electric and autonomous vehicles. In India, people are discussing electric and connected vehicles. The other areas that have done well for us are digital manufacturing, digital products, and medical technology. On 5G, though there are discussions, it is yet to take off.

Given the growth momentum, why is your guidance below market expectations? The expectation was high teens and the revenue guidance was between 13-15 percent.

Had we had this conversation sometime in March, I would have given you a different answer. I mean, you understand the near-term challenges. So all I would say is I want to look upward and beyond that. I’m fairly confident of the future.

So, is it, in part, because of the second wave?

Yes. I think we had two choices. We could have said double-digit growth and left it there. We could have put up somewhere and moved up from there. So that's what we've done. What we don’t want to do is step back.

So I looked at all that was happening. April is over and it's what we expected it to be and June is coming in. There are uncertainties there. The big thing is that clients are very empathetic. That's a big positive for us.

Are there any client concerns? Have you put specific business continuity protocols in place to tackle the second wave?

So, last time around, (it was a) concern and so we got client permissions to work from home. Now, we have created a secure IT infrastructure network that allows us to work from home with client confidentiality. We have successfully done that and don’t see your concern there.

Almost hundred percent of our workforce has been enabled to work from home, but there is about 2 percent of our population that needs to come to work to access labs and high- computing machines (in the premises). So we’ve created bio bubbles in a couple of cities, where we have taken apartment complexes, and allowed people to walk to office with sanitisation protocols in place. We are also running proper Business Continuity Planning (BCP) regiments under a retired Colonel, who is our chief BCP officer, along with the logistics and the admin staff.

Is the second wave impacting deal closures?

A client's decision does not depend on what is happening in India but what is happening in their country. In the US, after infections came down, we are seeing regular decision-making happening. Of course, with COVID-19, it's a little slower because you are not all in the same place. It's almost as normal as it can be.

In Germany, I've seen decision-making cycles to be almost regular. In Sweden and France, too, decision-making has been normal. In the UK, it has been a little slow now and should improve with the infections down. Japan has been mixed since people by nature in Japan are not used to making decisions remotely.

Though more people are back to work from home, what is LTTS’ thought process on future of work?

Even if you look at the next two years, at least, you will not have a hundred percent back to work. People do want to come to work (and some tasks cannot be done remotely). Amazon has been buying office space, like crazy. I have inaugurated a new building in Mysuru.

I believe, in the longer term, what we are getting ready for is two or three things. One, we are getting ready for the fact that there will be a workforce that will be working from office and another from home. Two, we are also getting ready for a future where there may be cities where I don’t have an office, but I have a workforce. It may not be huge, but that's a model that's developing. It may be hyperlocal workspaces, but the story has not played out yet. Three, India was still working on 'my workplace and my work desk'. That is changing to a flexi desk. You get your stuff, you come in, you go.

From the LTTS perspective, that is what we are gearing up for. Normally, we would have taken up more building space. But...we have enough space for the next couple of years at least.