AM Naik steps down as non-executive chairman of LTIMindtree, L&T Technology Services

A. M. Naik, chairman emeritus of Larsen & Toubro Ltd (L&T), has stepped down as the non-executive chairman of the construction conglomerate's two listed technology arms—LTIMindtree Ltd (LTIM) and L&T Technology Services Ltd (LTTS). He would also exit the boards of both the companies.

The group ruled out a merger of the two subsidiaries and denied any churn in the senior leadership.

“Our core competency has been engineering. We believe that by focusing on engineering separately will bring an expertise that we will not be able to do perhaps by mixing the two,” Naik said in a press conference after the annual general meetings of LTIM and LTTS on Wednesday.

Also Read: L&T's A.M. Naik: The man who raised an army to fight a hostile takeover

In 2023, the 82-year-old, who has been associated with L&T for nearly six decades, resigned as the non-executive chairman of the $27-billion conglomerate, handing over the reins to the current chairman and managing director S. N. Subrahmanyan. 

Subrahmanyan will now also be the non-executive chairman of LTIM and LTTS.

Reflecting on his tenure, Naik said:“I am immensely proud of the journey from the early days of L&T Infotech to the IT giant LTIMindtree is today. It has been a privilege to lead such an organization and lay the foundation for future growth. Under Mr. Subrahmanyan’s leadership, I am confident LTIMindtree will continue to reach new heights.”

No senior exits 

LTIM was formed after the conglomerate merged its IT services arm, L&T Infotech, with Mindtree in November 2022. L&T acquired Mindtree through a hostile takeover in 2019.

The L&T chairman emeritus also ruled out any change in the LTIM leadership anytime soon. “I do not see any change in leadership. We have all of our people, we have a CEO, president of sales and a COO. I do not see any change coming in the near future,” Naik said, adding it is too early to start looking for a replacement for LTIM CEO Debashis Chatterjee, whose three-year term ends in November 2025.

Also Read: End of an era: AM Naik steps down as L&T Group chairman after 20 years at helm

LTIM, India's sixth-largest IT services firm by revenue, reported a drop in its quarterly revenue for the first time in the March quarter 2023-24. Its revenue fell 1.3% to $1.07 billion from $1.08 billion in the December quarter. Its operating margin, too, fell 50 basis points to 15.7%, down from an initial guidance of 17-18% for 2023-24.

“We have become number five by market cap… I think, we are doing well and last year had not been so well for the whole industry, because of the geopolitical issues world over,” said Subrahmanyan. “Things are, at the moment, looking a little better for this year. And we think that this year's performance will be better than the last year’s.”

The group that needs about 45,000 engineers and labourers is also facing workforce challenges. “We would, including attrition, need 20,000 engineers for the IT and ITes business and another 25,000-30,000 labourers for L&T group,” said Subrahmanyan.

Also Read: How A.M. Naik, man with the Midas touch, transformed L&T

“We want to grow organically that is how most of the business at L&T has grown and that will be our thrust as well. But if there is a very sensible opportunity we will consider. There is nothing on the cards,” said Subrahmanyan when asked about future acquisition plans.

Subrahmanyan also added that both companies together had nearly $200 million worth of Gen AI deals. “We have seen a rise in Gen AI deals, and beyond that within L&T also we are pushing in a lot of Gen AI applicability along with a co-pilot to see how to improve ourselves as an organization from an operational efficiency point of view.”