Infosys sticks to FY'12 revenue guidance amid euro debt crisis

November 15, 2011




The country's second largest software exporter Infosys today retained its guidance of 17-19% revenue growth in FY12 notwithstanding the persisting euro zone debt crisis.

"I hope the developments in the eurozone area will be in an orderly fashion so that the companies can plan, unlike the 2008 crisis," Infosys Chairman Kris Gopalakrishnan told reporters here on the sidelines of the India Economic Summit 2011 today.

He added that any change in guidance would be made in the next quarter results, as by early January its clients finalise their IT budgets.

Italy, which has been at the centre of the euro zone crisis, now has its premier-designate and economist Mario Monti trying to form a new government as the nation tries to avoid financial disaster.

In Greece, Lucas Papademos has been sworn in as Prime Minister after his predecessor George Papandreou was forced to step down following a call for a referendum on a euro zone rescue package for the debt-laden country.

The Bangalore-based company had lowered its guidance, with revenues expected to be in the range of $7.08-7.20 billion, (17.1-19.1% growth year-on-year) as against $7.13-7.25 billion it had expected earlier.

The debt crisis in Europe and the unemployment and economic uncertainties in the US are major concerns for the Indian software firms, which get more than 80% revenues from these markets.

With the uncertainties prevailing, it is expected that clients may cut discretionary spends.

Talking about expansion, Gopalakrishnan said, plans to set up new development centre at Indore in Madhya Pradesh at an investment of Rs 100 crore in phase one.

He further said that if required, they would increase the head-count to 10,000 at similar investment in the second phase. According to him, setting up a development centre usually takes around 12-18 months.

The company is now focusing on growing the international markets as well as acquiring clients in new sectors. “We are looking three development areas in France, Germany and Japan. Secondly, we look for where we want to go faster, media, public utility and healthcare. The third is services, where we want to grow faster, maybe consulting. So actually we have a multi-prong strategy for growth,” said Kris.