Mindtree founders to stay on and ensure smooth transition
Mindtree founders Rostow Ravanan, Krishnakumar Natarajan and NS Parthasarathy have agreed to stay back with the company for some time to ensure a smooth transition, a company spokesperson said. The three founders had resigned from the company earlier this month after engineering conglomerate Larsen & Toubro took control of the Bengaluru-based software services firm.
“The focus of Mindtree is for smooth transition to the new leadership team, maintain business momentum and create shareholder value. The founders have been requested to extend their support towards this,” a company spokesperson responded to an email query.
This means a leadership change is evident, and the founders will exit the company soon although a timeline has not been provided.
There have been reports that L&T group chairman AM Naik, who is also the non-executive chairman of Mindtree, had requested the company founders to stay back because of the unsatisfactory first-quarter results for FY20.
Natarajan said the founders agreed to stay back, without giving a timeline, to ensure a smooth transition, The Economic Times reported.
On Wednesday, the mid-tier IT services firm reported a more than 40% drop in net profit for the quarter ended June 30, 2019, at Rs 92.7 crore compared to Rs 158.2 crore in the corresponding quarter last year. The decline in profit was steeper in sequential quarters with net profits diving 53.2% compared to the quarter ended March 31, 2019.
The company’s consolidated revenues from operations during the June 2019 quarter increased 11.9% to Rs 1,834.2 crore against Rs 1,639.5 crore in the corresponding quarter last year.
Interestingly, as soon as L&T completed acquiring a controlling stake, Mindtree’s founders resigned from the company. Incidentally, Wednesday was expected to be their last working day.
Co-founder Subroto Bagchi had stepped down earlier from the company.