Infosys CEO and MD S D Shibulal talks to Bibhu Ranjan Mishra and Pradeesh Chandran about the firm’s financials and the rationale behind lowering (dollar-terms) revenue guidance for the full year. Edited excerpts:
For the third consecutive quarter, you have missed the dollar guidance.
If you eliminate the currency impact and the one-time impact (because of loss of a project), we would have ended up in the middle of the guidance. We took a one-time reversal of revenue of about $15 million (Rs 84 crore) as a matter of prudence for the project which got cancelled. It is a one-time process.
But investors seem to be losing patience.
Our strategies are definitely yielding and our results are showing early signs of success of our strategies. Our revenues in rupee as well as dollar terms have grown year-on-year. We have met our EPS (earnings per share) guidance. We had strong client addition and strong deal closure. We are seeing good traction in the products and platforms space. So, we are very clear that we are on the right path.
Why can’t you altogether stop giving guidance?
We can’t do that because we can’t change the first principle. The first principle is that if you have the information, then give it. It’s a statement of facts that we know. Today, as a statement of fact, we have a fair amount of confidence that we can at least meet the five per cent growth.
But to achieve this five per cent of y-o-y growth, you need to achieve three per cent growth very quarter on a sequential basis.
Yes. We have to grow three per cent sequentially to achieve the growth. Given all the information we have, we hope we can achieve it.
Talks that the problems at Infosys are company-specific are getting louder. Is this true?
I have always articulated our growth depends on our portfolio, client base and service lines. About 30 per cent of our service line is dependant on consulting and system integration and 34 per cent on financial services. Both these segments that are a large chunk of our revenues are undergoing a challenging environment.
Unlike other IT firms, Infosys has not given wage rise or announced to give it soon.
First, we have given promotions to about 20,000 people with effect from July 1. We have said we would look at compensation hike when the environment gets clearer. Last time, when we announced deferring the hike, we relooked at this in September-October. We will revisit this decision during the same time.
