Venu Lambu's appointment as LTIMindtree CEO will drive sales, help bring larger deals: Experts

Venugopal Lambu, CEO Designate, LTIMindtree

LTIMindtree's appointment of industry veteran Venugopal Lambu as the CEO designate has left industry experts hopeful for a turnaround. This comes as the country's sixth largest IT services firm saw slower growth post-merger amidst a challenging business environment for the IT sector.

Erstwhile L&T Infotech and Mindtree were merged in November 2022, with Debashis Chatterjee being named as the CEO and MD.

For the longest time, there were industry-wide speculations that internal candidates, COO Nachiket Deshpande and now former president Sudhir Chaturvedi, were the frontrunners for the top job once Chatterjee's tenure ends later in 2025. The company, however, went with an external candidate, Lambu, a former president at Mindtree where he led the global markets transformation and capabilities of the company in a three-year long stint.

According to industry analysts, LTIMindtree has struggled to create its identity as the new big player after merger to compete with the Tier-I IT peers. Further, several of the company's senior leaders and high performers had quit between 2023 and 2024.

Phil Fersht, CEO, HFS Research, a global business research consultancy, said, "LTIMindtree's performance has been mediocre since the merger.  The company has struggled to keep its high performers, has lacked an identity in the market and is struggling to keep up with the 'Big 5' Indian heritage IT services majors."

Fersht believes Lambu could change the silos as a "highly accomplished client leader schooled in the early Cognizant entrepreneurship culture and highly familiar with the LTIMindtree from his recent time with the organization."

Lambu has over 30 years of experience in the industry has worked across Cognizant, Randstad Digital, HCLTech and IBM.

"He has a very sharp focus on business and doing the right thing for the customer. He is very detail oriented and at the same time builds genuine relationships with clients.  Internally he doesn’t tolerate non performers and takes quick decisions, which is critical for the firm," Fersht told Moneycontrol.

While Deshpande is well respected in the firm and delivers very well for clients, Lambu is seen as having strong sales acumen and a reputation as a strong leader, Fersht explained.

With Lambu set to take over as the CEO later this year, Nitish Mittal, Partner at research firm Everest Group, said that the focus will likely be on driving large deals momentum, evolving and growing the UK, Ireland and Europe region, expanding on cloud and infrastructure services and better partnerships with cloud hyperscalers to drive deal flow and market recognition.

Mittal said, "Sudhir would have been a natural choice but most of his experience is with smaller/challenger IT service providers, which is one area where Venu has an advantage."

"Earlier they took a call between Venu Lambu and Sudhir Chaturvedi to lead sales during merger. They went with Chaturvedi from LTI, and they picked delivery head from Mindtree. But in the last one or two years, the sales didn’t perform at the benchmark we were expecting," said Pareekh Jain, Founder and CEO, EIIRTrend.

Also, with Lambu having been a part of the company will have it easier in terms of culture integration, Jain added.

Sudhir Chaturvedi had stepped down from his role earlier last week, to "explore new opportunities". Gaurav Vasu, founder and CEO, market intelligence firm UnearthInsight said that to be fair, Chaturvedi didn’t have enough time to build on the sales pipeline further before the CEO decision was made. The macro uncertainties and slowing discretionary spending didn’t help either.

Post the merger, Chatterjee had set the ball rolling for the company's future, even reporting its highest ever quarterly deal pipeline of $1.68 billion in the third quarter ended December 31, 2024. He has also set an ambitious goal for the company, to achieve revenue of $10 billion by 2032, from $4.3 billion currently.

Chatterjee has been widely regarded as a good leader having spent nearly two decades at Cognizant where he was responsible for a portfolio accounting for nearly 40 percent of the company’s revenue. He then joined Mindtree in 2019, before helming the joined L&T group entity.

Where does LTIMindtree stand

According to Everest Group, after the early momentum under Chatterjee, including the Mindtree takeover and eventual merger, LTIMindtree has recently underperformed in comparison to leading competitors.

"A major reason for this is the exit of most former-Mindtree leaders and the sub optimal integration with LTI (given both the hostile nature of the takeover and integration issues, most of the Mindtree brain trust has left)," said Mittal.

Mittal added that LTIMindree has also had sub-par relationships with the large technology companies (cloud hyperscaler, data vendors, etc.). These companies are now influencing how enterprises choose service providers.

Gaurav Vasu, founder and CEO, market intelligence firm UnearthInsight highlighted that the company’s growth has also slowed down from high double-digit growth (pre-merger) to decent margins and now even margins are getting eroded. Prior to the merger, as mid-tier firms, both L&T Infotech (LTI) and Mindtree saw double digit profit and revenue growth year on year.

"Those inefficiencies would have continued if an internal candidate would have been picked. The same challenges were faced by Tech Mahindra," he told Moneycontrol.

Vasu added, "Lambu may have not been seen as a CEO candidate from an external perspective but he did a pretty decent job in his last two stints. He will have a good command over BFSI and hi-tech network of customers. And he is operationally very strong. You need someone who can tighten operationally and margins can be controlled."

Usually companies in $1 to 5 billion revenue range play aggressively on the rate cards which leads to them getting deals at slightly lower pricing, impacting margins negatively.

There has also been a positioning issue. While the company was small and nimble, clients would prefer them for better accessibility and agility. Now with nearly $5 billion in revenue, they are often compared to large IT service providers such as Wipro, Tech Mahindra, Infosys, Cognizant, TCS, Accenture, etc. which is a difficult ask for them.

"They need to be clearer on what differentiates them as they evolve into a bigger services company," said Mittal.

To be sure, at present the company is focused on implementing its AI strategy. Chatterjee, during an interview with Moneycontrol this month, said that the company has been passing productivity gains to existing clients from doing AI related projects for them. He said that this will be cannibalising the company’s revenue in the short term while he expects more work from these clients based on this in the long run.