Infosys to Beat Industry Growth Rate in 18-30 Months: CEO
New Delhi: Once an IT bellwether, Infosys expects to regain its premier status and beat industry growth rates in the next 18 to 30 months.
The market performance of the over $8-billion company's has been improving with every quarter and its latest quarterly results are reflective of that, says chief executive Vishal Sikka.
"I would say another one and a half to two and a half years to beat the industry growth rate," Mr Sikka told PTI.
He was asked about the time Infosys will take to regain its bellwether status and beat IT and ITeS (IT-enabled services) industry growth rate.
The first non-founder CEO of Infosys, Mr Sikka was brought from German software major SAP last year to revive the company's fortunes.
"We had given a timeline. When Mr Murthy came back, he had given a three-year timeline starting with June 2013. I would say we are about half way into it and you have to give us a couple of years to finish that work," he added.
Nasscom, which represents the over $120-billion IT-ITeS industry, expects the sector's exports to grow by 13-15 per cent this fiscal year (2014-15) as against 13 per cent in 2013-14.
On the other hand, Infosys has given a revenue guidance of 7-9 per cent in dollar terms and 5.6-7.6 per cent in rupee terms for the current financial year.
Substantiating his statement, Mr Sikka said the firm has $5.53 billion is cash, zero debt and strong margin performance in the quarter.
"We increased our utilization to 82.7 per cent in the quarter. This was the highest level that we have seen in the last 11 years in any quarters. Our volume growth was 4.2 per cent. This is the highest sequential volume growth in the last 3 years over any quarter," he said.
Beating market expectations, Infosys had reported a 13 per cent jump in consolidated net profit for the third quarter at Rs 3,250 crore, helped by an increase in business and clients from North America, as also from India.
The firm's consolidated revenue rose 5.9 per cent to Rs 13,796 crore in the quarter ended December 31, while it maintained its revenue outlook for the entire fiscal year.
Increasing its focus on software products and new age solutions like artificial intelligence, Internet of Things, Infosys also said it has expanded its innovation fund from the $100 million to $500 million, which will be used to invest in young firms world-wide.
Infosys is a learning, knowledge-driven company and the ability to learn new capabilities is crucial to its progress, Mr Sikka said.
In October last year, he had said that the Bangalore-based firm's long-term target was to grow in the 15-18 per cent range, while a meaningful revival in the business would be visible within the next two years.
He said the company wants to up the ante on innovation in areas of big data, automation, artificial intelligence and so on.
Explaining further on the stress on new technologies and innovation, he said, "Of course we are happy about it, but it is a very early indication that things are working. Earlier I was talking about the artificial intelligence (AI) projects that we are working on."
"I think we have 11 or 12 purely AI-oriented projects going on and total in the company about 23,000 projects are going on. So, there is a huge difference. It will take time for these ideas, these technologies to make way into the mainstream."
During the company's quarterly results earlier this month, Mr Sikka had said, "Our 'renew and new' strategy, is being received well by our clients and our ecosystem and we are already seeing its early adoption."
On his new strategy, he had said, "My sense of the 'renew and new' is that in the case of clients it applies in a very simple way - they have existing systems and processes that they want to improve and renew to bring more efficiency and so forth."
Typically in the case of IT this takes the form of retransforming systems to run on the cloud and bring new open source technologies, he added.
"But, our renewal is about taking our own services, which we have been offering for the past several years and renewing each one of them on the basis on automation and advanced technologies."
"So the renewal of Infosys' existing services will lead to better productivity, better efficiencies and more revenue per employees. New things are the ones that are not there today, such as solutions based on design thinking, open source technologies for doing big data," The Infosys CEO added.
