India's Infosys Ltd is chasing more big-ticket contracts from Europe and the United States this year and keeping a lid on costs as the outsourcing services giant powers ahead with a turnaround to regain market share.
India's Infosys Ltd is chasing more big-ticket contracts from Europe and the United States this year and keeping a lid on costs as the outsourcing services giant powers ahead with a turnaround to regain market share.
India's second largest software services exporter raised on Friday its revenue growth outlook for the 2013/14 financial year to between 11.5 and 12 per cent from a previously forecast 9-10 per cent, citing higher demand for its services.
It reported its first decrease in its workforce in nearly five years, with overall attrition rates in the December quarter rising to 18.1 per cent from 15.1 per cent a year ago.
"While the organisation is going through transformation, there may be some minor disruptions," chief executive SD Shibulal told an analysts' briefing after announcing the company's earnings. (Watch)
"But as you can see over the last two or three quarters as the transformation has happened we have continued to focus on our clients, we have continued to focus on growth, and continued to focus on margins improvement."
The departure of 1,823 staff in the December quarter, and several senior executives over the last six months, comes amid a strategic shift led by founder N.R. Narayana Murthy, who was brought back last year after a string of disappointing results.
Mr Murthy, who returned from retirement in June 2013 to take charge of the struggling company, spoke to the media on a range of issues. "Sad to see some excellent people leave the company," he said, wishing "ex-Infosysians" success in future. (Watch)
Infosys did not say whether the employees had been laid off or had left voluntarily.
"I am not too worried about it. With every restructuring there are some people who have to go," said Juergen Maiar, a Vienna-based fund manager with Raiffeisen Euroasien Aktien, which owns Infosys shares.
"We are looking at improvement in utilisation with the reduction in staff numbers, which is good for investors."
Infosys shares rose as much as 3.6 percent after the company announced its quarterly earnings. The Mumbai stock market was trading 0.7 percent higher.
Infosys was once considered a bellwether of India's export-driven $108 billion IT outsourcing industry, but an inflexibility on prices, among other factors, resulted in it losing market share to rivals like Tata Consultancy Services Ltd , Wipro Ltd and Cognizant Technology Solutions Corp.
Infosys, which has been struggling to boost revenue from its own software platforms and high-margin consulting business, appeared to have some success in winning over large deals as the turnaround took hold.
It said the number of $100 million-plus revenue clients rose to 15 in the quarter up from 12 a year earlier.
Worldwide IT spending growth is expected to accelerate to more than 5 per cent in 2014 after growing last year at its slowest pace since the financial crisis, according to the International Data Corporation.
Infosys, whose customers include Bank of America Corp and BT Group Plc, said net profit for the three months ended December 31 was Rs 2,875 crore, compared with Rs 2,369 crore a year earlier.
That compares with the average estimate of Rs 2,715 crore by 21 analysts, according to Thomson Reuters I/B/E/S.
Revenue rose 25 per cent Rs. 13030 crore in the quarter. The company added 54 new clients during the quarter, taking the tally to 888.
Copyright: Thomson Reuters 2014
Sign Up with Google
RECOMMENDED FOR YOU
POPULAR