The Chief Executive Officer of Infosys, Salil Parekh, who took over in 2018, has been helming the next phase of the IT giant’s growth story. Even as the sector faces a slow growth market, Parekh is optimistic about maintaining growth momentum and exploring opportunities. In a detailed interaction with businessline, Parekh sheds light on the rationale behind low guidance, the outlook for the sector, reading of the demand environment, and the company’s approach to inorganic opportunities. Excerpts:

Q

Is the hyper-growth phase that Indian IT enjoyed for a very long period of time now over? Should we anticipate low- to single-high-digit growth?

It depends on how closely one gets aligned with what clients are doing. Infosys grew 19 per cent, two years ago and 15 per cent last year. These are very large growth numbers on a very large set of capabilities. Hence, if the market environment allows, its technology is allowing it, as the economic environment changes through its ups and downs and we continue to build the right capabilities for our clients, I think the opportunities are fantastic.

In the last few years, cloud computing has been growing at a very large pace and very quickly. The more we build a portfolio that can address the global market, that will make a difference, so I remain quite optimistic.

Q

The shocker last quarter was the guidance, which was probably not expected by the market. Is it challenging, at least in the near term?

We had a very strong and solid quarter, as we saw in the market. What we also saw was some slowing, particularly in financial services, telecom, and some parts of retail where large digital programs had clients slowing down or stopping given their own situation in the macro environment. With that, we also saw that some of the new large programs that we were winning the start of that was getting pushed out, and the time to close them was a little bit longer. Hence, we gave an indication that we see some of that giving us a positive benefit at the back end of the financial year.

Q

Given the current set of market pressures, are you trading a little bit of margin for growth?

Our focus is absolutely on high-margin businesses; there is no debate on that. Within the company, we have an aspiration; we’ve launched an expanded program on margin attention. On pricing, we are very clear, and we have a clear approach with clients. We are not in a position where we will trade something for something else. However, we do think we can be more efficient in the way we are managing our business — delivery capabilities and pyramid — and that’s the focus and attention we have.

Q

Is GenAI only a buzzword? What is the opportunity it presents, and what is the effect it will have?

Generative AI, I think, is truly a change. It’s a definition, a landmark of a move, in my view. We have taken an open-source Generative This Generative AI platform now, customized to our software development approach, is already working well, so that gives us the benefit of productivity but also the speed to do more things. GenAI is moving at a huge speed; it will make things more efficient and easier, and the bigger use is that it opens new areas. It’s a new era; it is not replacing anyone

Q

 In the current environment, would you be looking at some inorganic moves? 

We have kept an open eye on acquisitions in the last few years. We have not done anything large in the last couple of years. I think the pricing was a little bit inappropriate for us. We are open to and looking at acquisitions, but not in the sense that, because the environment is different, we are suddenly going to do something disproportionate. If there is an opportunity that fits strategically and culturally, the price makes sense and we know how to integrate it, then we will deploy capital as well. 

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