The ongoing global financial crisis has resulted in one of the most challenging times for the IT sector. Infosys CEO S (‘Kris’) Gopalakrishnan speaks to the media about these challenges.
Analysts say that you may miss the upper end of your dollar guidance. Could you elaborate?
We do not give revised guidance in the middle of the quarter. If we have to say anything about this, we will inform you. It is a difficult environment. Currency movements will definitely have an impact. But it is difficult to say at this point to what extent it will happen. That is why we have said that because of high volatility, we should focus on numbers in constant currency.
What is the assessment on billing rates?
We have seen flat billing rates. The ability to raise billing rates is very limited. We have not seen any renegotiations. There is no trend here at all. Last quarter was good in terms of client additions. We added about 40. We are adding clients even now. We are also starting new projects.
How do you see the election of Barak Obama as the next president of the US?
We will have to wait and see what kind of policies the new administration will have. Globalisaton is an opportunity for countries anywhere, including the US, and India will continue to be one of the economies with a good growth rate. For businesses to flourish, the environment should be right. We should continue to support globalisation. We will have to see if there is a change in policy. In the past, we have seen that even though things like these were mentioned in the campaign, it did not translate into policy action.
Are you looking at mergers and acquisitions at this point, when companies are available at attractive valuations?
Acquisitions are not made based on valuations alone. You do not buy something because it is cheap. You do that because it makes strategic sense and you can integrate that entity properly. So you look at the right company at the right price. We are looking at acquisitions. We have a dedicated team which focuses on acquisitions.
What kind of acquisitions are you looking at?
We have two focus areas for this. The first is to fill a gap in our services like consulting or BPO. The second is geography-based, typically in Europe and Japan and places where we can accelerate growth by making an acquisition.
What is the geographical distribution of your overseas revenue stream?
Sixty two per cent of our revenue comes from North America, while 28 per cent comes from Europe and 10 per cent from the rest of the world. We continue to rebalance our geographical spread. We will try to get to a ratio of 40 per cent in North America, 40 per cent in Europe and 20 per cent in the rest of the world. But this won’t happen in the near term.
