Infosys sees its revenues growing 16.7 per cent during the financial year 2002-02 and its net profit margin climbing 32 per cent against a growth of 27 per cent in the previous fiscal, the management of the software major told the media during a conference call organised in Bangalore.
In a presentation given by Basab Pradhan, senior vice-president and head - worldwide sales, he said that following the dotcom bust the focus of corporate houses shifted from spending on IT and e-business to control or rationalising IT. "Besides, uncertainty in the market place resulted in very low IT spend," he said. "However, companies are now again ready to spend on technology, as they believe it will add business value," he added.
Infosys has been searching for a strategic acquisition for three years but has not made any acquisitions to date because of valuation issues, lack of acquired management commitment, absence of revenue visibility, financial weakness and discipline. "Though the company`s organic growth has remained comfortable, we do plan to acquire companies in the near future," the management said.
Infosys is open to striking an alliance with a partner having specialization. The medium term strategy of the company will be growth through alliances, Infosys management disclosed during the presentation. Infosys generates 85 per cent of its revenues from repeat business. "The company expects good growth in volume from existing clients even as the pricing pressure has stablised. A few new customers are also coming in at or above average rates," Pradhan said.
In the offshore segment, Infosys is looking at business solution in a big way due to high margins in this business. Recently, the company bagged two business solution orders - GreenPoint Mortgage and one unnamed client with an order size of $ 6 million to be executed over a year.
Progeon Ltd, business process management venture of Infosys, which started in April 2002 employs 265 people and has three clients (high-tech equipment manufacturer, mortgage service provider and financial service provider).
Volume growth has been is good in the BPO segment, though the severe billing rate pressure in call centres seems to have rubbed on to the business process management segment. BPM rates are 10 per cent below the call centre rates. "Industry players have dropped the call centre rates to $5. Infosys is currently operating Progeon at $11-12," the management said.
Source: IRIS