Infosys is continuing to see tough times. In fiscal 2012, the company lowered its guidance three times and in the first quarter of FY13, the company has again revised its guidance for the year ahead to 5 per cent from 8-10 per cent that it had guided for in the January-March quarter.
Mr V Balakrishnan, CFO and Member of the Board, Infosys, spoke to Business Line about the need to have a long-term view on the company and the continuing business transition as undertaken in the backdrop of a global economic turmoil.
Analysts are saying that the Infosys story is over.
I will say that analysts are losing sight of the long-term and looking at only the short term. It is a well known fact that over the last few quarters we are seeing that the IT services are getting commoditised. Also, as we have laid out the Infosys 3.0 strategy, we are looking at a portfolio mix that would involve 30 per cent of our revenues coming from the products, platforms and services (from the existing six per cent). All this cannot be achieved overnight.
You are seeing negative growth in the US and Europe. Do you plan to exit Europe?
I would say that Europe is holding up good for us. However, there are large macro-economic concerns, questions regarding the collapse of euro and a general tendency of reduced offshoring when there is a slowdown. The UK is into a recession too. Unlike the US, Europe is slow when it comes to embracing outsourcing or offshoring. We are living in the new normal and the transformation we have undertaken before will yield results in the future.
Is this transformation complete or is it a work in progress?
We have finished the transformation in terms of putting in place vertical heads. But if as we move into products and related businesses, we are entering a different domain as the client needs are different from what we have been used to.
Are you ready to settle the case with your US employee Jack Palmer?
All we can say is that we will go into mediation with Mr Palmer with an open mind. We believe that we have a strong case and will defend it.