Mindtree Consulting

MindTree Consulting Ltd, a mid-size Indian software services company, aims to broaden its portfolio of services by setting up new practices to serve customers in manufacturing, banking and financial services industries, as also enter high-end back-office services as the firm seeks to grow faster.

Bangalore-based MindTree, which counts Pfizer Inc. and Sony Corp. among its key customers, has forecast revenues of up to $180 million (Rs739 crore) for the year to March 2008, a growth of around 36%, driven primarily by these new initiatives. In a bid to fuel its growth for the next five years, “MindTree has established these new practices by hiring veterans from companies such as Tata Consultancy Services and Wipro,” said Subroto Bagchi, chief operating officer of MindTree who has recently relocated to the US to help the firm win and manage larger customer deals.

While MindTree will stay away from establishing any presence in providing back-office human resource or accounting services to its customers, “the hunt is on for somebody to establish and spearhead a knowledge process outsourcing business involving high-end analytics,” Bagchi added. The company will also be open to acquiring a niche outfit specializing in analytics, an emerging business focused on statistical analysis of large volumes of data to throw up trends that companies can use to, for instance, increase sales or reduce costs.

In the past four months, MindTree has hired Ashok Hegde, who headed the securities practice at Wipro, “to build capital market services right from scratch, apart from picking up a TCS veteran who will build the company’s business for manufacturing customers,” said Bagchi.

The company plans to establish centres in Europe and China for serving customers in those and neighbouring markets. “Clients want us to de-risk and are valuing proximity,” Bagchi said.

However, analysts tracking the company and industry said it might not be that easy for MindTree to establish new practices. “...the tier I players are entrenched, and you cannot focus on generic skills even within a vertical,” said an equity analyst with a Mumbai-based brokerage firm who did not wish to be quoted. “If they are talking about capital market, they should further specialize in areas such as derivatives to differentiate.”

Shares of MindTree were listed on the Bombay Stock Exchange in March. They closed at Rs548, down 0.38% on the Bombay Stock Exchange on a day when the exchange’s benchmark Sensex index rose 0.52%.