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Posts Tagged ‘Infy’

Infy, TCS likely to beat forecasts

December 23rd, 2011

IT bellwethers Infosys and TCS and mid-tier companies such as MindTree and Hexaware are likely to beat street forecasts, in spite of the uncertain macro-economic environment. Analysts at Kotak Institutional Equities research said offshore IT companies can beat the Street’s low double-digit growth forecasts.

“The macro environment remains uncertain and challenging. Memories of a couple of bad revenue growth quarters for Indian IT services firms after the Lehman crisis are still fresh,” the Kotak analysts said, adding that there was less possibility of seeing such a sharp slowdown in revenue growth.

Few IT industry leaders have previously said that banking, financial services and insurance (BFSI) verticals would slow down or be flat in the next quarter due to the ongoing crisis in the euro zone. BFSI contributes about 20 to 30 per cent of revenue for many of the top IT companies.

The report said there was no such strong correlation linking the global macro slowdown to companies’ IT spends and IT outsourcing. The report said IT offshoring growth story is about gaining market share within existing IT spends. It does not depend much on growth in overall IT spend.

The report cited several instances where IT companies have performed beyond market’s expectations. It said the form 8-K filing by Cognizant with the Security Exchange Commission of the US, mentioned about setting up the 100 per cent variable company’s target for senior management at ‘at least 23 per cent’ of dollar revenue growth for 2012 estimated.

“We believe Cognizant would have built in ample cushion to account for potential macro-driven pricing pressure as well as adverse cross-currency movements. Volume growth assumption built into the 8-K revenue targets is likely higher. We also note that Cognizant refrained from setting current year 2009 performance targets for the management in current year 2008 – clearly suggesting that the clichéd ‘this time is different’ may be true as far as comparing the current scenario to the post-Lehman one is concerned”, read the report.

Another instance, which it mentioned, was about strong November 2011 earnings report from Accenture. “Revenue momentum sustained, bookings were strong (outsourcing bookings were up 40 per cent YoY), the company reiterated its year-ending Aug 2012 revenue guidance, and hiring numbers were robust”, read the report.

Source:http://www.mydigitalfc.com/news/infy-tcs-likely-beat-forecasts-649

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Infy raises concerns on negative sentiment about outsourcing

May 9th, 2011

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Country’s second largest software exporter Infosys has raised concerns that negative sentiment about outsourcing in various countries, including the US and the UK , could hurt its business prospects .

In recent times, there has been increasing criticism about outsourcing in many developed markets, especially in the wake of huge job losses due to sluggish economic activities.

“Recently, some countries and organisations have expressed concerns about a perceived association between offshore outsourcing and the loss of jobs,” Infosys said in a recent filing to the US Securities and Exchange Commission .

“Legislation in certain countries in which we operate, including the US and the UK, may restrict companies in those countries from outsourcing work to us or may limit our ability to send our employees to our client sites,” it noted.

This comes close on the heels of Infosys announcing less than expected financial performance last month, with a consolidated net profit of Rs 1,818 crore for the fourth quarter ended March 31, 2011.

For the year ended March 31, the IT bellwether posted a consolidated net profit of Rs 6,823 crore, up nearly 10 per cent over the year-ago period.

Infosys expects revenue in the range of Rs 7,311-7,382 crore for the quarter ending June 30, 2011, and in the range of Rs 31,727- Rs 32,270 crore for the financial year FY’12.

Voicing concerns, the software exporter in the filing cautioned that there could be a change in existing laws or enactment of new legislation restricting offshore outsourcing.

The Governor of the State of Ohio had recently prohibited governmental entities from using public funds for offshore services.

According to Infosys, it is possible that private sector firms working with these governmental entities may be restricted from outsourcing projects or may even face disincentives if they outsource certain operations.

“If either the US federal government or another governmental entity acquires an equity position in any of our clients, any resulting changes in management or reorganisations may result in deferrals or cancellations of projects or delays in purchase decisions…,” the filing said.

Source:http://economictimes.indiatimes.com/tech/software/infy-raises-concerns-on-negative-sentiment-about-outsourcing/articleshow/8197697.cms

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Infy BPO sees 20% rise in revenues

March 7th, 2011

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Infosys BPO, the global outsourcing arm of Infosys Technologies, is expecting 18- 20% increase in revenues for FY 11, with numbers expected in the similar range for FY12 as well. Operating margin is likely to be maintained at 20 to 22%, said D Swaminathan, managing director and chief executive officer of the company. For the year ended March 2010, Infosys BPO’s total revenue was at $352.1 million. With headcount currently at 20,000, the BPO will be making a gross addition of 8,000 employees for the fiscal starting April 1, Swaminathan added.
“This year has seen good growth. We are still working on the numbers, but I would expect the next year to see similar figures. We are bullish on the banking, financial services and insurance market, although manufacturing and retail is also seeing good traction. On the hiring front, we will look at 2000 gross recruits per quarter for FY 12,” said Swaminathan at the sidelines of an event to promote BPO trade relations between India and Philippines.

With markets opening up, the company’s attrition is also going to be on the higher side this year, closing at 30 to 35% on a quarterly annualised basis.

Swaminathan however said that it was likely to come down and stabilise at 25 to 30% in the next fiscal.

Source:http://www.financialexpress.com/news/infy-bpo-sees-20-rise-in-revenues/758207/0

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Infy closes BPO in Bangkok

July 16th, 2010

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The business process outsourcing (BPO) arm of India’s second-largest information technology services company, Infosys, has shut its centre in Bangkok, which it had acquired from Philips. The centre was primarily handling the back-office works of Philips globally. As a result, the company has moved about 40 of the 175-odd staff at the centre to China.

Confirming the development, Infosys BPO’s CEO and MD Swami Swaminathan said, “We could not scale this centre from a service offering standpoint, as most of our international clients are very comfortable sending work either to India or China. Therefore, we have moved the business to China and India. Even at the time of buying the centre from Philips, we knew it was not a scalable centre.”
Infosys had taken over the back-office operations of Philips Global located in India (Chennai), Poland (Lodz) and Thailand (Bangkok) in July 2007, with an assured revenue of about $250 million over seven years. These three centres were together employing about 1,400 employees then.

This is the first instance since the acquisition of Philips Global’s BPO operations that Infosys has started a rationalisation exercise.

The company had started shifting a majority of outsourcing contracts that came with the acquisition to its centres in Pune and Chennai, to deliver works at a “better cost and with better efficiency”.

“This is a part of our game-plan. It was not expected that we would continue to use these centres to work for Philips. The idea was to move work around and wherever the capability existed to deliver at a better cost and more efficiency,” added Swaminathan.

Meanwhile, Philips continues to be one of Infosys BPO’s leading clients. Recently, Philips recognised Infosys BPO as one of its top three global vendors bringing in innovation. Over recent years, Infosys BPO’s Philips account has grown significantly.

However, the company does not have any plan to scale down any of its other international centres. Last year, the company established BPO centres in Brazil and Mexico. The company also has centres in China, Manila and Poland.

Source:http://www.business-standard.com/india/news/infy-closes-bpo-in-bangkok/401587/

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Infy bags $150-mn Microsoft order

April 15th, 2010

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To manage its internal information technology services across 104 countries for 3 years.

Infosys, India’s second largest information technology services company, has got an outsourcing contract from Microsoft to manage the global giant’s internal IT services across 104 countries.

The three-year contract is said to be a little over $150 million (Rs 665 crore), according to company sources, and involves managing Microsoft’s help desk, desk-side services, IT infrastructure and applications support in 450 locations globally.

Infosys will also streamline the implementation processes, simplify support and service and attempt to lower enterprise costs through the use of the latest Microsoft solutions such as Windows 7, the Bangalore-headquartered company said in a statement.
“This managed services agreement will further strengthen the Infosys-Microsoft partnership. Infosys will deliver this engagement in an outcome-based pricing model, enabling Microsoft to associate and manage IT costs directly to business variables and demand,” said Sanjay Jalona, vice-president and head, manufacturing, North America, Infosys.

Infosys will establish a ‘Service Excellence Office’ to help Microsoft implement various standards and processes. Infosys had already partnered with Unisys to provide global desk-side support and service desk services.

“The integrated solution developed by Infosys, combined with process compliance, a robust tool platform and the creation of a Service Excellence Office will help us enhance how we deliver end-user computing services to our internal employees and partners, while leveraging the innovation and investments we make in developing new technologies,” said Jim DuBois, General Manager of Service Management, Microsoft.

By moving its non-core internal IT support and services work to Infosys, say analysts, Microsoft will be benefitted by focusing on its core product development, marketing and branding exercise. “This will not only help Microsoft in terms of sizable cost savings; it will also help them to move from a capex to opex model. As far as Infosys is concerned, it is a fairly significant deal for them, with a high level of opportunity to expand it to a sizable business,” said Sabyasachi Satpathy, MD of Tholons, the IT outsourcing advisory firm.

Source:http://www.business-standard.com/india/news/infy-bags-150-mn-microsoft-order/391976/

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Infy BPO ties up for big rural push

March 13th, 2010

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Infosys Business Process Outsourcing (BPO), a unit of Infosys Technologies, that started focusing on the domestic market last year, expects 5% of its overall revenues from Indian clients in the next two years. In a bid to cater to the Indian clients, the firm is expanding in rural areas by co-partnering with third party sub-contractors, thus leveraging on the existing infrastructure of these providers and thereby reducing the overall cost of delivering services to rural clients. Through these small size business service centres, the firm would provide back office consolidation services to local government agencies and service clients in the telecom, manufacturing, banking, insurance and financial services space.

Vaitheeswaran S, head, India business unit, Infosys BPO, said, “Co-partnering with these small third party vendors makes business sense for Infosys as the overall cost structure goes down. Besides, they have a better grip over the local people and understanding of the characteristics. Additionally, from our end, we bring process knowledge and brand.” Currently, the firm has tied up with a few such vendors for multiple centres in Andra Pradesh and plans to expand in other southern states, in Karnataka and Tamil Nadu to start with. These would be smaller centres with about 100 to 150 people at a particular location and each centre generating revenues in the range of Rs 50 lakh to Rs 1 crore per month. “We intend to keep few people in these multiple centers as a larger center wouldn’t be as economical,” added Vaitheeswaran

Soure:http://www.financialexpress.com/news/Infy-BPO-ties-up-for-big-rural-push/590145/

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Infy, HCL in race for Westpac’s $500-mn outsourcing contract

December 18th, 2009

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Australia’s second-biggest bank Westpac is seeking outsourcing suppliers for contracts worth up to $500 million, with India’s top tech firms Infosys, HCL and others bidding against multinational rivals IBM and HP-EDS.

The bank, which is currently merging its systems with St George Bank, is being advised by a consulting firm on fleshing out an IT transformation programme, aimed at saving over $400 million from operations by 2011.

Australia’s top banks including Westpac, National Australia Bank (NAB), Commonwealth Bank of Australia and ANZ will invest almost $4 billion on technology this year, according to experts tracking the industry. The country’s IT market is worth around $39 billion, according to research firm Forrester.

“HCL, Infosys and Wipro, apart from IBM, are already in discussions with Westpac for these contracts — offshoring being considered as a critical portion of these engagements,” said a senior executive at one of the top tech firms exploring this opportunity. He requested anonymity because he is not authorised to comment on any potential business.

For Indian vendors, Westpac contract offers an opportunity to gain business from IBM, which is due to renew its contract with the bank next year. While Infosys declined to offer any comments because of its ‘financial silence period’, officials at HCL did not respond to an email query sent by ET on Thursday. Westpac officials, too, did not respond to the ET query.

Westpac, which acquired St George Bank last year for $19 billion, wants to have a common general ledger and consolidate other systems, including payroll. The IT integration costs alone will be around $338 million, apart from an additional $168 million being earmarked towards outsourcing and restructuring.

“Apart from the integration with St George, Westpac is also seeking suppliers for over $250-million application development and maintenance contract,” a consultant said.

Source: http://economictimes.indiatimes.com/infotech/ites/Infy-HCL-in-race-for-Westpacs-500-mn-outsourcing-contract/articleshow/5349895.cms

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