LTIMindtree Growth Likely To Be Aided By Venu Lambu's Appointment As CEO: Analysts

With Venu Lambu's appointment as the chief executive officer, LTIMindtree Ltd. is expected to see margin recovery and secure more large deals, boosting its growth prospects, according to analysts.

LTIMindtree recently appointed Venu Lambu as the CEO designate and whole-time director with immediate effect. He succeeds Debashis Chatterjee, who has been the CEO since the LTI-Mindtree merger in November 2022.

Lambu is a former LTIMindtree executive who served as its president and executive director for three years. He had moved to Randstad Digital as its CEO two years ago before making a comeback at LTIMindtree.

"Venu is the right person for the task ahead in terms of his experience and the timing, given the current challenges LTIMindtree faces," Gaurav Parab, principal research analyst at tech research firm NelsonHall, said. "His experience in managing large relationships will come in handy for margin recovery as LTIMindtree as well as some of its peers seek to strike a balance between sustaining margins and demanding clients that want a larger bite of the productivity gains due to AI and automation."

The new CEO will also be able to drive large deals, and the early signs of improvement in the demand environment will aid the case. However, the large deals in the broader market itself have been limited, according to Sumit Pokharna of Kotak Securities.

Over the last three quarters, LTIMindtree's has seen an increase in the order book and contract value, which reached $1.68 billion in the previous quarter. The company is also actively participating in cost-cutting initiatives and recovery efforts.

"The uncertainty surrounding the situation has been resolved, which is a key development. Additionally, the newly appointed leader is highly experienced and skilled, with a strong background in sales and delivery, having held leadership roles at major organisations like Cognizant and IBM," Pokharna said.

Analysts also say that Lambu would also be able to further the intent of the LTI and Mindtree merger as he settles in a while after the integration pains have disappeared. The intent of the merger previously was to compete with the Tier 1 IT firms in the industry and focus on vying for more large deals in the market.

The merger aimed to elevate the company to Tier 1 status, but it resulted in losing agility of mid-size companies and inculcating the bureaucracy of Tier 1 companies. It has also not been able to perform better than Tier 1 companies in terms of large deals to achieve a competitor position, partly due to sectoral downturn, according to Pareekh Jain, chief executive officer of Pareekh Consulting.

"Amid this, Lambu seems to be the apt candidate to steer the ship as he retains the familiarity of having worked there, while he brings new approach and enthusiasm in execution," Jain said. "Bringing in a familiar candidate or company veterans has proven to be a better strategy for companies, as bringing someone entirely new to the culture hasn't worked well for some companies."