Infosys::Takeaways Motilal Oswal Annual Global Investor Conferences

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Key Takeaways
Core essence: Any impact of global headwinds on the industry will only persist in the
short run; growth rates are likely to sustain over the medium to long term.
Industry insights
 Compared to 2008, businesses are better prepared now to respond to any global
meltdown. Companies had already braced themselves for a slow, gradual recovery
rather than a quick turnaround. Macro-led impact on business will be short-lived.
The long-term picture is positive, given new areas of opportunity.
 The industry will continue to witness double-digit growth over the medium to long
term, given multiple levers around new markets and new solutions.
Company vision and strategy
 Focus to return to clients after restructuring: Infosys is prepared to cater to
the next wave of growth in the industry. With the restructuring process behind,
focus will be fully channelized to the clients.
 To be more relevant to clients: The company will look to be more relevant to
clients in trying to help them build tomorrow's enterprises by focusing on themes
around which the clients will seek growth: [1] emerging markets, [2] sustainability,
[3] mobility, [4] healthcare, and [5] social networking.
 Focus on Consulting and Non-linear growth: Infosys intends to continue focusing
on the Consulting/SI segment (~30% of revenue) and growth in the Non-linear
segment will be a thrust area. Revenue from platform-based/Cloud streams may
be small to start with, but afford greater visibility over the long run. The company
currently derives ~8.5% of its revenue from the Non-linear segment.
 Productivity improvement to be the focus in Operations segment: The
global delivery model offers little scope for differentiation. Business IT Services
(ADM, BPO, IMS; ~61% of revenue), will struggle to see higher growth in rates.
Here, Infosys will try to leverage technology to increase revenue productivity.
Key triggers/milestones/challenges
 ~25% of Infosys' clients and ~50% of its top-50 accounts engage with the company
in Consulting/SI services. Infosys' SI component involves very little pass-throughs,
differentiating it from competition and helping it to achieve superior revenue quality.
 As employee costs continue to grow by 8-12% every year, Infosys will need to delink
its revenue growth from employee growth, by focusing on non-linear revenues.
 The company continues to expand its global delivery network by penetrating into
countries like China, Germany, France, Mexico, Brazil and Costa Rica.
 While Infosys will be hiring more employees onsite, lower utilization at onsite could
impact its margins. It will seek to achieve this by increasing the Consulting/SI
engagements onsite, where utilization is typically lower.\


Mr S Gopalakrishnan is the
Executive Co-Chairman of Infosys.
Before assuming his current office in
July 2007, he served as Infosys' Chief
Operating Officer, President and
Joint Managing Director, responsible
for customer services, technology,
investments and acquisitions.
One of the founders of the company,
Mr Gopalakrishnan served as Director
(Technical) and his initial
responsibilities included the
management of design,
development, implementation, and
support of information systems for
clients in the consumer products
industry in the US.
Mr Gopalakrishnan has represented
Infosys and India in international
forums such as: The Indo-US CEO
Council, President's Council of New
York Academy of Sciences, and
Member of UNESCO High Level Panel
on Women's Empowerment and
Gender Equity. He is Chairman of The
Business Action for Sustainable
Development 2012 (BASD), a
coalition of international business
groups committed to sustainable
development. In January 2011, the
Government of India awarded Mr
Gopalakrishnan the Padma Bhushan,
India's third highest civilian honor.