No, we do not intend these to be rumors or slurs on the companies and managers mentioned. Any identikit attempts by budding engineers, chiropreneurs and statistical algorithms are frequently discouraged and found to be unactionable in a court of 'law'. Please keep your humour and digestive capabilities intact while spreading erious analysis as serious rumors..

Despite a prior sojourn, we are not related to any manager or party in Mndtree and do not sponsor or actively / passively support any of the IT Services' industry's strategies. We also discourage activist investors and quant research experts esp with "acadamics" background. 

Here is our take on the recent jump in MindTree stock even as VIX loves its lullaby and points to a right point for the market jump. Are you nervous. A dull Friday, makes you forget sometimes.

Banking has moved far into the stratosphere if you compare it to the nervous nineties for Indian IIM and IIT educated MBAs fighting for a few positions and capital market traders oping for shreds of sense in the few banking stocks going around. However, in the Capital Markets business, we were the earliest to attain Nirvana, wiht a balance of WOM, research and now we even have analytics and Ph d reaching required redundancy in decision making echelons. In this light the IT services and BPO revolution of the nineties and the oughtes has been a neglected cousin despite the market attention it did receive ahead of Economic Surveys, never in the budget itself. Having world in the industy(ies) when international travel and direct interaction with high level users was a must, I find the precarious siuation of the industry since 2007 quite entertaining and I blame the insiders for this state of the industry. Well, MindTree is no exception, neither are the captive BPOs which did not even have any aspirations going for them by the time a EXL services came to a $50 million quarter. To the point, MindTree wishes to go to a $250 million quarter, same as Genpact ( with 45% of GE business in 2010) reached in 2009 and twice that of WNS started by British Airways procurement guys fed up of doing their own revenue accounting. 

They have management, a smattering of talent they keep churning and the acquisitions targets left for them in the applications and infrastructure space were really limited and full of native talent not resplendently shouting for joining at the hip. Back in Banking and Capital Markets they were left with precious little for Clients with the Industry going Captive. Going by the brilliant past record of the company since 200-01, they will likely go for a pocket power purchase in captive BPO. Losing the AIG captive would have been a disaster for the advisory team, Emphasis ffering a better satisfaction on cost control and confidentiality for future 10 years revenue from AIG. 

That leaves MindTree with a shot at the big ticket Fidelity which is a little too big for their stable, mature nature of small business. More likely would be the research desk of Credit Suisse or a little baby that needs holding hands not SCOPE which has been up for sale for 5 years now. But then if the right discount is offered, there is enough management going around twiddling thumbs in that pocket notebook of the IT Services and BPO juggernaut from India. We have not seen a single deal since 2008. Banking is much more interesting.

 

 

 

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