In July, cigarettes-to-hotels giant ITC Ltd did something unusual. It slapped a Rs 100 crore ($13.3 million) defamation suit defamation suit cnbctv18.com ITC files Rs 100 cr defamation suit against portfolio manager Manu Rishi Guptha for blog post Read more against Manu Rishi Guptha, a financial blogger and portfolio manager. Just a month earlier, Guptha had launched into a tirade tirade Manu Rishi Guptha Magic, Illusion or just Trickery – The story of ITC Read more against the ITC management. Their decisions, he alleged, hurt the company’s performance and stock price.
The long list of complaints included scathing remarks on ITC Infotech, the conglomerate’s unlisted and under-the-radar software subsidiary. “There is no way that ITC Infotech can ever become anything meaningful,” he wrote.
The blog post seemed to have stung ITC. So much so that in addition to the defamation suit, for the first time, the group highlighted the performance of ITC Infotech in its June quarter results presentation.
Between the years ended March 2019 and 2021, ITC Infotech’s consolidated revenue grew 22% to Rs 2,454 crore ($327 million), while its net profit quadrupled to Rs 451 crore ($60 million).
The momentum continued in the June 2021 quarter—revenue was up 21%, and operating profit grew 79% year-on-year. This is a sharp pick-up from the tepid growth of its earlier years, when revenue and profit grew only in single digits or even contracted.
Two things seem to have contributed to the turnaround—new hands at the wheel and a strategy refresh.
In early 2019, ITC Infotech brought in Sudip Singh, former senior executive at Infosys, as chief executive officer (CEO). It also simplified its business model, going from serving a bouquet of business segments to a specific handful, all while aggressively chasing big deals. The latter, especially, was a significant departure from its earlier strategy, where it focussed on small deals.
There’s still a long way to go for ITC Infotech before it can reach the scale of the Mumbai-based Larsen & Toubro Infotech Limited (LTI)—the latter is about 5X larger in terms of revenue. But the company has overtaken smaller players such as Tata Elxsi Tata Elxsi The Ken The hedged house that Tata Elxsi built Read more and Happiest Minds Happiest Minds The Ken Irrational exuberance in Happiest Minds Read more , which have been the toast of the stock market over the past year or so.