MindTree, a Rs 800-crore software and R&D services company, is finalising the blueprint for its foray into the engineering services sector. This new vertical will be under the ambit of the company’s R&D services wing, which currently accounts for around 22 per cent of its revenues.
Speaking to Business Standard, MindTree CFO Rostow Ravanan said the strategy for the engineering services foray will be finalised by December and the company will most likely start offering it as a service from early next financial year.
| BLUEPRINT |
“We have an active client base for our R&D services, through which we offer hardware design and embedded software services. The engineering services vertical, to start with, can be offered to the same set of clients,” he said.
Industry sources indicate that even as MindTree is finalising this foray, it is keenly exploring options for an inorganic entry into this sector. “The engineering services sector, especially in the automotive and aerospace segments, has pretty high entry barriers and it is most likely that MindTree will look at acquisitions to ramp up this offering,” said an industry source.
According to industry analysts, there are some interesting targets in India such as Bangalore-based Quest Global and Hyderabad-based Infotech Enterprises which MindTree might look at as and when they finalise the strategy.
Engineering services provider Quest, which had a revenue of close to $35 million in the previous financial year, employs about 1,000 engineers. The company provides services to many global tier-I aerospace companies, including EADS and Magellan Aerospace.
Infotech Enterprises, which clocked a revenue of Rs 700 crore in the previous financial year, employs about 6,000 people. Currently, about 25 per cent of Infotech Enterprises’ stake is held by the promoters’ group. A couple of years ago, General Atlantic, a global private equity player, had made a substantial investment in this firm.