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Infosys Technologies
We hosted Mr. Subhash Dhar – Member of Executive Council and Group Head – Sales and
Marketing for interaction with investors at the DB Access India Conference. The salient
points discussed were as follows:
Overall demand is stable
The overall spending environment is not back to the levels of 2007-08. However, even though
clients IT budgets have not increased substantially, the volumes offshore have gone up
significantly. Pricing increases have not followed the strong volume growth yet. It is still
difficult to get coupon rate increases beyond cost of living (~2% yoy) related adjustments.
Telecom vertical likely to increase spending in 2HCY11E
The telecom vertical has been a key laggard over the past few quarters, but is showing signs
of improvement. The pipeline in this vertical is at its best in the last two years. The
management is seeing good number of high double and triple digits US$mn deals. There is
increased interest in offshoring by the cable companies in the US . This growth in deal
pipeline should be translated to high revenue growth in 2HFY12E.
Realignment of business model
The rate at which the traditional services are getting commoditised is higher than the
adoption of newer services. This is the most important challenge before the company. Thus
the commoditised services need to be bundled with higher value add services for a better
viability. In this light, the company is making fast progress in realigning its business and
organization structure to provide services under three key service stacks i.e transformation,
innovation and operation. This will add to the revenue and business value proposition. In a
few pilot projects they are now focusing on improving the net after tax profitability per
employee vs margins. Inspite of this the company will manage to hold onto its overall
margins.
Cloud computing
Currently these services are a sub unit in system integration but will be carved out soon a s a
separate service line. As for cloud, the company is offering two types of services (a) services
for the cloud (this is a big opportunity in the medium term) and (b) services on the cloud (
long term growth driver).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Infosys Technologies
We hosted Mr. Subhash Dhar – Member of Executive Council and Group Head – Sales and
Marketing for interaction with investors at the DB Access India Conference. The salient
points discussed were as follows:
Overall demand is stable
The overall spending environment is not back to the levels of 2007-08. However, even though
clients IT budgets have not increased substantially, the volumes offshore have gone up
significantly. Pricing increases have not followed the strong volume growth yet. It is still
difficult to get coupon rate increases beyond cost of living (~2% yoy) related adjustments.
Telecom vertical likely to increase spending in 2HCY11E
The telecom vertical has been a key laggard over the past few quarters, but is showing signs
of improvement. The pipeline in this vertical is at its best in the last two years. The
management is seeing good number of high double and triple digits US$mn deals. There is
increased interest in offshoring by the cable companies in the US . This growth in deal
pipeline should be translated to high revenue growth in 2HFY12E.
Realignment of business model
The rate at which the traditional services are getting commoditised is higher than the
adoption of newer services. This is the most important challenge before the company. Thus
the commoditised services need to be bundled with higher value add services for a better
viability. In this light, the company is making fast progress in realigning its business and
organization structure to provide services under three key service stacks i.e transformation,
innovation and operation. This will add to the revenue and business value proposition. In a
few pilot projects they are now focusing on improving the net after tax profitability per
employee vs margins. Inspite of this the company will manage to hold onto its overall
margins.
Cloud computing
Currently these services are a sub unit in system integration but will be carved out soon a s a
separate service line. As for cloud, the company is offering two types of services (a) services
for the cloud (this is a big opportunity in the medium term) and (b) services on the cloud (
long term growth driver).
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