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Mindtree, L&T Infotech union might begin on a strong base: Analysts

Mindtree, L&T Infotech union might begin on a strong base: Analysts

Amidst the speculations of anticipated merger of Mindtree and L&T Infotech (LTI) getting stronger, analysts reportedly think that the collaborated entity will begin from a strong growth foundation as the total contract value (TCV) altogether of both the firms at the end of Fiscal Year 2022 was around $3 billion. The experts are however still unsure about the timings of the merger.

As per credible sources, among the mid-cap players, both Mindtree and LTI have given a good performance record for the fourth quarter of FY22 and also for the full year.

LTI surpassed the $2 billion revenue mark for the fiscal year after its result reported that its achievement of bagging big deals continues. The large deal pipeline altogether was at $2 billion out of which 40% was derived from net new logos.

Furthermore, the total contract value of Mindtree for the entire year was at $1.6 billion, which was 16.7% year-on-year (YoY). For Q4 Fiscal Year 2022, the firm’s TCV was recorded at $390 million, signifying a raise of 4 per cent.   

After witnessing the robust growth momentum, analysts keeping track of the sector were not too sure about this being the correct time for the merger.

Peter Bendor-Samuel, Chief Executive Officer at the advisory company, Everest Group, stated that L&T is on the horns of a problem, with both LTI and Mindtree being top performers and performing better than the market.

Samuel quoted that the companies were performing highly better than the scaled competitors such as Wipro, Infosys, and TCS, therefore a merger is significantly risky.

Peter mentioned that the unison will broaden the customer base and positions and add scale collectively better in more industry segments.

He added that it is possible that a combined entity will be able to operate more effectively and relish economies of scale as overhead would be reduced via integration.

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Omkar Patwardhan

Omkar Patwardhan started his professional career in the hospitality industry. Having nurtured a deep-sated passion for words however, he found his way into content writing and now pens down articles for numerous websites, including News Origins, spanning the sectors of business, finance, and technology.