Infosys CEO Salil Parekh has praised the company’s founders for building an “incredible organization” and expressed confidence that the firm which has “always been solid” will “continue with that consistency”.
Mr. Parekh, who steered the firm to stability after a bitter dispute between the founders and the then management a few years ago, believes Infosys is “good enough” to take advantage of the tech-led growth opportunities over the next several years. in position”.
Mr Parekh assumed office in January 2018 following the exit of the then CEO Vishal Sikka, following a standoff between the board and founders, including NR Narayana Murthy, over governance issues.
Over the years, Mr. Parekh focused on navigating challenges and was credited with transforming the Indian IT giant.
When asked whether Infosys has left the turbulent times behind, Parekh told PTI in an interview, “We are in a good, stable, stable position. I think the company has always been solid.”
“We’ve seen the founders build an incredible organization. And so the company has always been in a good place. And we look forward to continuing with that consistency.” The company recently surprised the market by raising its full-year revenue growth outlook for FY13 to 14-16 per cent, citing strong demand and a strong deal pipeline.
Notably, in the last five years, Infosys’ consolidated revenue has increased from Rs 73,715 crore in the year ended March 2018 to Rs 1,23,936 crore in the year ended March 2022. Consolidated net profit has increased from Rs 16,029 crore in FY18. 22,110 crore in the year ended March 2022.
When asked about the big challenges and opportunities ahead, Mr. Parekh said Infosys is on a very strong foundation, with “truly incredible growth opportunities” emerging over the next several years in the technology sector as well.
“There are really incredible growth opportunities in the technology sector over the next several years. And I think we are very well positioned to take advantage of that, to make sure we play our part in this, whether in the cloud , in cobalt, in digital…” Mr. Parekh said, describing this as a great excitement and opportunity before the company.
The top Infosys executive said he is “quite optimistic” about where the industry is headed and Infosys’ position in it.
“What is clear to us is that we want to increase market share, which means growth, which exceeds the growth of the industry, and that is a good measure,” he said.
While the industry will go through its share of ups and downs, Infosys would like to grow at a faster pace than the industry. Over the years, Infosys has surpassed the industry average growth rate.
“..All big companies are going through technological changes. Infosys is well positioned for many of these technological changes. From India, we have a good supply of competent people, engineering science graduates who can work on it. So the opportunity is huge,” explained Mr. Parekh.
The challenge is to stay focused on what customers are looking for “and not get distracted by other things”.
“If we focus on that, I think it should be a relatively optimistic outlook for us,” he said. Infosys – which competes with Tata Consultancy Services, Wipro and others in the IT services market – reported a net profit of Rs 5,360 crore, or Rs 12.78 per share, compared to Rs 5,195 crore in the first three months of the current fiscal, or 12.24 per share a year ago.
Infosys’ revenue or turnover stood at Rs 34,470 crore in the first quarter of FY23, up 23.6 per cent from a year ago.
Higher employee benefits expense, sub-contract fees and travel expenses, however, drove up the overall cost for Infosys in the recently ended quarter.
The company had said that it would continue to optimize various cost levers to enhance efficiency in operations.
Operating margin for Infosys was lower at 20.1 per cent, while full-year margin guidance was 21-23 per cent.
The hike in compensation hit margins by 160 basis points, and utilization declined due to the impact of new freshers coming in.
Infosys emphasized that these were more in the nature of “investment” given the strong demand scenario and assured that it would look at cost optimization levers like better utilisation, and more automation. Pricing is another such lever and those are under discussion.
(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)