Infosys sees choppy growth for next two quarters

Infosys expects choppy revenue growth over the coming two quarters despite seeing improvement in the overall demand environment.

BANGALORE: India's second-largest software firm Infosys expects choppy revenue growth over the coming two quarters despite seeing improvement in the overall demand environment. 

In a meeting with equity research firm Nomura, the Bangalore-based company said its recent internal changes, ongoing cost rationalisation and consolidation of Switzerland based Lodestone, which Infosys had acquired last year, will have an impact on the company's near-term revenue growth. 

"Management indicated that the challenges to growth were more internal rather than external, as it would take time for the company to absorb the recent organisational changes," the Nomura report said. Infosys said it recognises that total contract wins worth $2 billion over the past four quarters is not sufficient, according to the report. 

Infosys, which it lagged its peers during the last two years, reported better-than-expected revenue growth in the first and second quarter of this fiscal year. In June, its cofounder NR Narayana Murthy returned to the company as chairman to rebuild a "desirable Infosys". 

Murthy has been implementing a series of changes at Infosys, including cutting costs at on-site work locations, aimed at improving the company's revenue growth. Since Murthy's return, the company has seen at least six senior level exits. In July, its global sales head Basab Pradhan quit, while in August, its global manufacturing head Ashok Vemuri resigned to join rival firm iGate. 

The company expects technology spending by its clients to increase next year, the Nomura report said. Infosys said it has not seen any signs that indicate next years technology budgets will be delayed. 

"The demand environment has improved, especially in financial services, where it is clearly visible according to Infosys. Discretionary spending has also increased in pockets, though it has not come back to the extent that the company would like," the report said. 

"Infosys is clear that they cannot afford to remain below industry in revenue growth." 

During the second-quarter earnings, the company had raised the lower end of its revenue guidance, saying it now expects revenues to grow at least 9% this fiscal. Software industry bodyNasscom expects the IT sector revenues growth in the range of 12% to 14%
.

Hi guys If u like this post please leave a comment in comment box... comment box will top right of every post and bottom of every post. its useful for me give a better information.. check top of the blog there is menu bar in that go to comments i replied for u r comments because there is no direct option for reply for u r comments. if u want to give any suggestion in bottom of blog there is contact information option please leave a msgs with u r mail id sure i will get u.