Restructuring of Citibank, one of the top two clients of LTIMindtree, and churn at the latter’s top management has put the sixth largest Indian IT firm at a greater risk of loss in wallet share compared to other IT companies, say analysts.
Citibank is also a client of TCS, Infosys and Wipro. Jefferies in a note said, “Citibank’s woes may add risks to growth. Citibank, one of LTIM’s top two clients and a $100 million+ relationship, is undergoing corporate restructuring to bring its costs under control. Amid this restructuring, Citi may optimise its IT services budget, which could in turn affect many Indian IT services firms, as Citi is a large client. Against this backdrop, management churn at LTIM could result in higher risks of wallet share loss for LTIM vs other IT firms”.
Another IT analyst said, “The company is still grappling with integration-related issues as can be seen for several high-level exits. The company, though, has been maintaining that it has ensured client satisfaction and flawless delivery even in the midst of a large merger and integration”.
Giving currency to integration issues, Jefferies also noted that the recent resignation of company’s CFO Vinit Teredesai suggests that integration challenges persist. “The CFO’s abrupt resignation follows several senior-level exits in the past 3-6 months. In our view, elevated churn at senior-management level suggests that the company continues to face integration challenges. This is a concern, especially given that it has been more than a year since the merger took effect.” After Teredesai’s resignation, LTIMindtree’s board appointed Vipul Chandra as its new CFO.
The company saw around 18 top-level exits in the last one year, including several CXOs like CTO, CFO, CBO, CMO, and others. Sources also said that the IT firm is grooming two internal candidates for the CEO role. Sudhir Chaturvedi, president and executive board member, LTIMindtree, and Nachiket Deshpande, COO, are believed to be contenders for the top job.
The note added that the IT firm is targeting 12% reduction in attrition by 2030 and 30% increase in diversity. It is also looking to have 50% of new role requirements to be fulfilled by internally groomed team members.