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Infosys saw $2.9 billion new deals in last four quarters

Demand for cloud, infra services drive contracts

Infosys saw $2.9 billion new deals in last four quarters

Employees walk along a corridor in the Infosys campus in the southern Indian city of Bangalore

Apurva Venkat Bengaluru
Infosys, India's second largest IT services company saw incremental new contracts in the last four quarters jump 53.7 per cent to $2.9 billion, driven primarily by deals in the cloud and infrastructure services that it won from larger global peers.

In the preceding four quarters, the deals won by Infosys stood at $1.9 billion, a note by JM Financial Institutional Securities Limited said post the analysts meet by the Bengaluru-based company last week. However, Infosys management said the company is seeing certain project ramp downs while signing of new deals were slow due to the global economic uncertainty.

"Average revenue per top-10 clients also has significantly increased and in the Q4 of last year again our growth in the top-10 and top-25 account was much higher than the Infosys average growth. So, these are all parameters which clearly say that some of our strategies are resonating well and our level of engagement with most of our top and strategic clients are improving in the last 6 to 12-months," Pravin Rao, Infosys chief operating officer told analysts.

 

"Particularly in the areas for instance if you look at significant percentage of large deal wins is in the areas of Cloud and Infrastructure Services.There, it typically comes from global players who are probably incumbent for the last 5-10 years. But in other areas we have enough evidence of having won against India-based players as well," he said.

Infosys chief executive Vishal Sikka is scripting new path for Infosys, pushing the company to adopt automation and deliver higher value services to its global clients. At the same time, Sikka is facing new challenges as clients such as RBS shut projects or slow down in deals due to the economic uncertainty that arose out of Britain's decision to move from the European Union.

Infosys has also revamped the internal sales CRM to enhance sales productivity.

"The company is also using software efficiently to find out blind spots in its offerings to a client; point out any potential risks in a client portfolio. A separate sales team has been put together to exclusively sell the New (product, platforms etc) offerings to clients," JM Financial analysts Pankaj Kapoor and Abhishek Kumar wrote in the note.

Also Infosys is now increasingly focusing on process automation rather than task automation. This initiative has so far focused on fixed price projects and it helped Infosys release 3,200 people from existing offshore based fixed-price projects in FY16 and 2,000 in the first quarter of the current financial year. However, the impact on overall reported revenue/employee has been limited as only 16 per cent of the company's wage bill is offshore.

"Infosys expects a more visible impact on revenue/employee as it starts to release people from onsite/T&M projects and move people up the pyramid using automation," Kapoor and Kumar wrote.

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First Published: Aug 31 2016 | 4:54 PM IST

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