Infosys targets retail, automobile sectors

Anshuman Daga and Narayanan Madhavan

BANGALORE: Indian tech bellwether Infosys Technologies Ltd is focusing its software solutions business increasingly in the retail, aerospace and automobile sectors to complement the traditional area of financial services.

Infosys, India's first company to list on Nasdaq in 1999, has carved out business units to focus on these new clients, Chief Executive Officer Nandan Nilekani told Reuters in an interview on Tuesday.

"That's really the big push happening today at Infosys," said 47-year-old Nilekani, who has steered the firm to 25 percent profit growth after a two-year slowdown during which he took over the reins from co-founder N.R. Narayana Murthy.

Shares of Infosys were trading at a 32-month high of 5,005 in Bombay on Tuesday after more than doubling in the past seven months as investors bet on a recovery in the sector. Bombay's broader index has gained 70 percent in the same period.

Infosys' revenue has grown to $754 million in the year to March from just $68 million in 1998. Boosted by U.S.-led outsourcing, sales are set to top $1.0 billion in 2003/04.

Seen now as a consultancy player, and no longer as a cheap Indian contractor, it faces competition from the likes of Accenture and IBM who are furiously expanding in India to emulate the low-cost edge that Infosys pioneered.

REVIVAL SIGNS

Nilekani, who graduated from the prestigious Indian Institute of Technology but stayed in India instead of heading West for a high-paying job, said there were signs of revival in technology spending. But more crucial was the continuing trend to boost outsourcing as global giants cut back in-house technology work.

Infosys, sitting on a cash chest of $472 million, was in no hurry to make a much-awaited acquisition, as it was already growing sufficiently and sought value for money, he said.

After starting his career with Bombay-based Patni Computer Systems, Nilekani teamed up with six friends led by Infosys Chairman, N.R. Narayana Murthy, and with just $200 contributed by their spouses created Infosys more than two decades ago.

Infosys' overhaul has seen the exit of half a dozen high-flyers from its 40-member management council, sparking speculation about poor employee morale and a management crisis.

But Nilekani dismissed this as unsurprising in a 20,000-strong company trying to keep its competitive edge.

"I don't think it's a serious problem," he said from his spacious office overlooking a 59-acre Bangalore campus dotted with shining glass facades, pizza joints and trees.

Infosys, which ranks behind privately held Tata Consultancy Services, has seen its employee numbers grow from 2,600 in 1998. It added a record 2,025 employees in July-September and aims to hire at least 3,000 more in the next six months.

"We are creating new roles, designating people to head these business units, we are empowering them," Nilekani said. "I think some people will leave in that environment but it is well within what we anticipated."

Reuters