Infosys seeks buyouts in France, Germany

Infosys Technologies, the country's second-biggest software company, is seeking acquisitions in France and Germany to raise sales in the region and help the company become less dependent on the US market, chief operating officer S Gopalakrishnan said in an interview.

"Generally we are looking at acquisitions in Europe, especially in the areas of solutions, consulting,'' and in countries such as France or Germany, Gopalakrishnan said in an interview from Davos, Switzerland, where he is attending the World Economic Forum's annual meeting.

Infosys reported record third-quarter profit on January 11 after banks and insurers increased orders, the third straight period of more than 50 per cent growth in earnings. Sales climbed 44 per cent.

The company aims to reduce its reliance on the US, where it generates 60 per cent of sales, by expanding in other markets.

The Bangalore-based company's long-term target is to derive 50 per cent of sales from North America, 30 per cent from Europe and 20 per cent from Asia, Gopalakrishnan said.

Europe has grown in the past five years from being 14 per cent of sales to about 26 per cent of sales now, he said.

Infosys still aims to win more orders to customise software and manage computer networks in the US, after being added to the Nasdaq-100 Index last month.

Keeping Up
"Clearly the challenge for the industry is growth and adding people,'' Gopalakrishnan said.

The company is doing "multiple things'' to attract workers, he said. Infosys is relying on the value of its brand, which has made it "a preferred employer in India so we are able to attract a lot of people," he said. The company also recruits at the entry level and trains workers, the COO said.

Infosys said earlier this month that attrition, the rate at which workers quit, increased to 13.5 per cent in the three months ended December 31 from 10.8 per cent a year earlier.

Software makers, including Infosys and its larger competitor Tata Consultancy Services, are facing problems in retaining employees as global rivals International Business Machines Corporation and Accenture hire India's low-cost engineers.

Infosys's third-quarter net income rose 52 per cent to Rs 983 crore ($221 million), beating the Rs 978 crore profit analysts had anticipated.