The country's second largest software exporter Infosys today said it remains bullish and will continue to invest in Europe, even though the share of the region to its overall revenue has fallen in the first quarter of this fiscal.
Infosys, which reported a 2.42 per cent dip in its profit, has seen the contribution from Europe come down to 20.3 per cent during the April-June quarter of this fiscal from 24.7 per cent in the same period last year.
"The impact of Europe is less. Even in this quarter sequentially, it declined very slightly. But overall, the growth is pretty good that shows that we have been able to take advantage from other areas and cover up for the slowness which we are seeing in Europe," Infosys Technologies chief executive and managing director Kris Gopalakrishnan here today said after announcing the Q1 results.
The euro has massively depreciated in the last few months amid worries that some European countries could default on their government debts. This is expected to result in reduced revenue and earnings from European clients of Indian software firms.
Though it said the situation in Europe still looks manageable, it is cautious on the continent, saying "the US has gone ahead of the recession...We are yet to see that in Europe, where there are still local concerns as well as the tail effect of the previous recession. Of course, Europe entered the recession late and we believe that it will also come out late," company chief operating officer SD Shibulal said.
"We believe this is a temporary thing...Aspirationally, Europe is very important for us. We expect that Europe will be eventually about one-third of business in the long-run," he added.
Terming Britain as a growth area for the company, Shibulal said the company is investing in the Europe region, including recruitment of country managers and local staff in Germany and France.
"We believe Europe will lag behind the US for another quarter or so. In Europe, in immediate term, the growth will come from actually acquiring new clients and that requires investments which we are already making," Gopalakrishnan said.
