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India’s second-largest software services exporter,Infosys expects revenue growth of 15 to 20 per cent in its outsourcing arm this fiscal year,its head said on Tuesday,downplaying fears of a slowdown in its key markets.
Infosys,a bellwether for India’s $76-billion software and services sector,has seen its stock slide on fears of a further slowdown in the United States and Europe,which provide more than 70 per cent of its revenue,since posting underwhelming first quarter results in July.
(Global slowdown) shouldn’t affect the BPO business. A downturn should in fact help the BPO business,Swami Swaminathan,chief executive of Infosys BPO,said.
When people don’t do well,they are obviously looking at opportunities to be more efficient. And that’s when they reach out to us,he said.
Fears of a recession in the United States,which provides India’s outsourcing industry with more than half its revenue,dragged India’s IT index down as much as 3.8 per cent on Friday to its lowest level since November 2009.
US-based outsourcing companies can benefit at the expense of their Indian rivals when US spending slows and American companies come under domestic fire for sending business overseas.
Last week BNP Paribas downgraded the sector to deteriorating from neutral,following growth forecasts below market expectations from Infosys competitors Wipro and Tata Consultancy Services .
Last two years,we have been growing at about 20 per cent,Swaminathan said.
I think we would be growing anywhere between 15 to 20 per cent (this fiscal year),he said.
Infosys shares rose as much as 4.8 per cent after the comments,in a choppy Mumbai market.
Last month,Bangalore-based Infosys posted a below-forecast rise of 15.4 per cent in fiscal first quarter profit,and saw wage hikes hit margins amid intense competition from rivals such as IBM and Accenture .
At the time,it forecast overall fiscal year dollar revenue growth of 18 to 20 per cent.
Swaminathan said the company was continuing to look into potential acquisitions to add scale in regions such as Europe,Asia Pacific,Latin America and Africa,and the firm’s strategy was for both organic and inorganic growth.
We are quite agnostic from a location of a prospective candidate. But we are not interested in doing the acquisition for getting only the top-line growth,he said.
The firm expects to have net employee additions of 2,500 to 3,000 this fiscal year,he added.
Infosys’s BPO arm operates across Asia-Pacific,Europe and the Americas with about 19,500 employees and about $427 million in annual revenue as of the last fiscal year.
India’s outsourcing sector,which employs close to 835,000 people and accounts for more than a third of the global back-office market,generated export revenue of $14.1 billion in the last fiscal year,according to industry body NASSCOM.
