L&T Infotech has announced a separate business unit for Cloud and expects $1 billion in revenue in the next 3-5 years, according to two analyst reports.
Apart from a separate business unit (BU) for Cloud, the company also have a new BU for products. The reports by brokerage firms Motilal Oswal and ICICI Securities were based on the Analyst Day conference with the LTI management.
In addition, LTI is a Tier I partner for many hyper scalars and nearly half of its existing client base works with the company on cloud-related engagements. This is the opportunity the company is looking to tap into. Current revenues from cloud stands at $185 million.
According to Motilal Oswal and ICICI Securities, to achieve the $1 billion revenue, LTI has already carved out a separate business unit for each of the cloud service provider and aims to take them to new clients.
The company is currently building a separate team of cloud specialists to bring best expertise in the work. LTI will also create labs to research on the newer features of cloud.
Sudheer Guntupalli and Hardik Sangani, research analysts, ICICI Securities, said in a note that the $1 billion revenue is too ambitious. “LTI’s aspirations for $1bn in cloud revenue in three years implies close to 78 percent segmental CAGR. (It is) too ambitious, we do not construe this as formal guidance,” they added.
However, Guntupalli and Sangani, said the separate BU for products presents a good option on grounds commercial success of similar products in the market and LTI’s execution strategy.
The product business will help clients make sense of data generated by moving to Cloud. This would be done through its five key products and also SaaS version of those products to reach larger audience.
ICICI Securities note said these five products, which are built around data, include Decisions, ML Logistics, Agnitio, Marketplace, and Leni. These will be taken to market.
“Management hinted at investments in engineering, R&D, sales, and marketing of these products,” the report said. The company would offer these products in Software-as-a-Service format, where they can be accessed in app stores as well.
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