Indian IT will rebound to 8-10% growth by next year, says Soota

The Ashok Soota-led Happiest Minds Technologies made its debut on the stock exchanges recently, with shares listing at a premium of 123% over the issue price of ₹166. A second innings of sorts for the 77-year-old former Wipro executive and co-founder of Mindtree, which went public in 2007 under his leadership, Mr. Soota started Happiest Minds in 2011, at age 68. In an interview, he spoke about entrepreneurship, evolution of the technology industry, the digital focus of Happiest Minds, its IPO and outlook for the industry. Excerpts:

What is the key to success in tech entrepreneurship?

To stay on the leading edge of technology and offer integrated, complete solutions that are cloud-based, powered by artificial intelligence and automation and which can be put to multiple uses. These are critical.

How has the sector evolved over the last 30 years?

Technology evolves continuously with solutions getting richer. For example, many of the earlier e-commerce ventures failed because of weak technology infrastructure. Once bandwidth and communication capacity improved exponentially, a boom followed.

The key thing, therefore, is to create new business models with technology and not just be focussed on the technology itself.

Also, technology is invariably the first sector to bounce out of recessions because it, in fact, provides the tools to ride out of crises.

In the current world, with work-from-home emerging as a new norm, there is a spurt in demand for security, deployable across multiple work environments. This is a great area for Happiest Minds to explore.

‘Digital’ wasn’t yet the mantra when you started Happiest Minds, was it?

Happiest Minds was born in the digital era and, therefore, it was a logical step for us to focus only on new digital solutions. This helped us dramatically improve customer experience, productivity and to create new business models.

Digital today accounts for 97% of our business when it is 30% to 50% for larger listed tech firms in India. This is what has enabled us to grow at a CAGR of 20% plus compared with the industry range of 8% to 10%.

How do you view Happiest Minds’ debut performance in the stock market?

The response to our IPO is gratifying but there are two areas of concern. First, with such oversubscription, many potential investors got left out. Second, we now have additional responsibility of meeting the expectations of our new investors.

I should add that apart from our digital focus, what has helped is a market favourable to IT stocks and the depreciation of the rupee.

What would be the 5 key things Happiest Minds would be doing in the next 5 years?

First, we must step back and take a look at the landscape. We have a system of a five-year vision. Our most recent Vision statement targeted an IPO in FY23… we have done that two years ahead. Now, we need to set fresh goals for ourselves. This exercise will take a few months of deliberation with our teams and will reflect in our new Vision.

Also, an IPO is a great opportunity to demonstrate the higher levels of corporate governance in an organisation. This is an area in which I have taken a lot of pride at all the companies I have led.

What, in your view, is the tech industry outlook in a pandemic-hit marketplace?

Whenever there is a recession, the first sector that bounces back is technology services. Already, a couple of companies have stated that they would come back to FY20 levels by the end of this year.

Also, there is a lot of new demand for technology, which will accelerate growth. I visualise that a fair proportion of people will continue to work from home and spur demand for e-commerce and security.

The drive for growth of education technology will further accelerate. Another key area of major growth is e-Health. The overall outlook for the industry is certainly optimistic. I believe the Indian IT industry will get back to its growth rates of 8% to 10% from next year.

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