Business Standard

<b>Q&amp;A:</b> S D Shibulal, CEO &amp; MD, Infosys

?Can?t avoid external business environment?

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Pradeesh ChandranBibhu Ranjan Mishra

Infosys posted strong financials allaying fears that there could be a drastic cut in information technology (IT) spending by global clients amid global uncertainties.

In an interview with Pradeesh Chandran and Bibhu Ranjan Mishra, CEO & MD S D Shibulal discusses the trends the company and the industry expects to see. Edited excerpts:

You saw one of the highest addition of clients (45) this quarter, which is considered a soft one. Could you give a break-up of the sectors they belong to?
We had a good number of client wins this quarter spread across most of the sectors we focus on. We added 10 new clients in manufacturing and 18 in energy, utilities and life. The remaining are evenly spread across other key sectors.

Despite showing some good numbers, you still have a cautious approach. What makes you so worried? 

The macroeconomic indicators are very challenging. The unemployment rate in the US is still high. Besides, there are multiple challenges in the US, including lack of consumer and enterprise confidence. The financial industry is going through a turmoil. So, all these things, coupled with the euro zone turbulence, make the environment tougher. 

How are you positioning the company to face those challenges? 

We have 637 clients and have done several things to be relevant to them. They now see business values in our solutions.

Will these initiatives help you to brave past the challenging environment? 

As a company, we can never avoid an environment where we don’t have much say. External business environment always influences companies such as ours. So, there will always be some impact, whether it is macroeconomic challenges, confidence issues or any other things. 

Do you think such environment may influence clients to ask for pricing renegotiation? 

At this point of time, pricing will remain stable, through we have seen a marginal (0.5 per cent) increase in pricing. Negotiations happen always, which pushes the prices up and down. However, we do not see any unusual activities. But we can’t predict the future. 

There is a drop in revenue contribution from fixed price contracts this quarter. Are the clients preferring time and material contracts? 

There is no material change in the fixed price contract. It is a quarterly abrasion, which could change in coming quarters.

 

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First Published: Oct 13 2011 | 1:29 AM IST

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