Infy ups hiring target, parks Rs 5,500 cr in MFs

Infosys has revised its hiring target for the current financial year to 24,000 people, from 20,000 earlier.

Chief executive officer Kris Gopalakrishnan said on the sidelines of the company’s third quarter results in Mysore that Infosys recruited 8,700 people in the third quarter ended December 31. In the fourth quarter, the company plans to add another 6,000 people, to take the total additions this year to 24,000, he said.

The company is said to be keen to go in for more local hiring, given the persistent issues on H1-B visas. This will also serve staffing requirements from new acquisitions to be made this year.

Infosys also reported a record 478 per cent jump under its ‘Other Income’ head to Rs 231 crore in the third quarter. This is up from Rs 40 crore reported in the same period a year earlier. Other Income for the nine months ending December 31 was Rs 738 crore, increasing 230 per cent year-on-year from Rs 221 crore earlier. “Our investible surplus has hugely increased. Our margins grew by 40-50 basis points, contributing to the surplus increase, which also increased our overall cash reserves to $3.1 billion. The net yield on surplus income has been 5.5 per cent. The increase in Other Income is largely on account of this,” said Chief Financial Officer V Balakrishnan.

Currently perched on humongous cash reserves of $3.1 billion (Rs 14,000 crore), Infosys is parking approximately Rs 5,500 crore in mutual funds. Its cash reserve was Rs 9,488 crore in the same quarter a year ago.

Telecom sector spend to rise
Infosys, India’s second largest information technology services company, expects spending in the telecom segment to return in the next few quarters.

Despite a 6 per cent sequential (quarter on quarter) growth in Q3 (October-December), the company is cautious about the sector. For the third quarter ended December 31, revenue contribution from telecom was 16.2 per cent. In terms of geography, 43 per cent of revenue came from the US, 42 per cent from Europe and 15 per cent from the Asia-Pacific.

“The negative growth that we saw in the last few quarters due to drop in investment within the sector is clearly behind us. We think the spends will be much higher next year. As the credit squeeze has eased, we will see investment in network expansion increasing,” said Subhash Dhar, Senior Vice-President and Head of Communications, Media and Entertainment.

Dhar also sees a huge opportunity from the application stores (app stores) being set up by telecom companies. The company already has a partnership agreement with Aircel to launch a mobile store. “We are in talks with other telecom players and with players outside of India as well,” said Dhar.

App stored are a coming focus area for Infosys, as Dhar feels service provider the world over are realising that revenue from network-based services are steadily getting smaller. Value, on the other hand, is shifting towards application. “Almost 80 per cent of applications on Apple’s App Store are paid; just 20 per cent are free to download. Operators have no choice but to expand. This is where our application platform, Flypp, comes in,” said Dhar.

Flypp, is an application platform that enables mobile service providers to enhance customer experience with a host of ready-to-use experiential applications across several devices, says the company.

However, Dhar also see challenges in this sector. “First, currency movement. Close to 50 per cent of revenue in the telecom sector comes out of the US. So, currency becomes important. Two, revenue concentration among the top few clients is very heavy in this sector. This also stems from the fact that there are few large players in this segment,” he added.