Infosys COO Pravin Rao explains growth drivers in business verticals

Infosys reported revenue of $3.13 billion (+10.6 percent) during the quarter ended June 30, 2019 as against $2.83 billion in the year-ago quarter.
Infosys for technology outsourcingIndia’s second-largest IT services company posted net profit of $546 million in the June quarter from $ 534 million in the year-ago period.

Bangalore-based Infosys has increased its revenue growth guidance for FY20 to 8.5-10 percent in constant currency. In April quarter, Infosys had said it expected a revenue growth of 7.5-9.5 percent in FY 2019-20.

“We had a strong start to FY’20 with constant currency growth accelerating to 12.4 percent and digital revenue growth of 41.9 percent. This was achieved through our consistent client focus and investments which have strengthened our client relationships,” Infosys CEO Salil Parekh said.

Infosys’ total number of employees reached 2,29,029 in June 2019 from 2,28,123 in March 2019. Infosys has 2,15,412 software professionals at present. 37 percent of the total employees are women, Infosys said.
Infosys revenue first quarter fiscal 2020Infosys said digital revenues reached $1.119 billion, accounting for 35.7 percent of total revenues.

Infosys has generated 31.4 percent of the revenue from Financial Services, 15.8 percent from Retail, 13.8 percent from Communication, 13 percent from Energy, Utilities, Resources & Services 9.6 percent from Manufacturing 7.7 percent from Hi Tech and 6.1 percent from Life Sciences segment.

Some of the latest clients of Infosys include Finnish postal service Posti; Toyota Material Handling Europe; and Pan-American Life Insurance Group (PALIG).

Infosys has generated 61.6 percent of the revenue from North America, 23.6 percent from Europe, 12.5 percent from Rest of the world and 2.3 percent from India.

Growth drivers

Infosys chief operating officer Pravin Rao revealed that the company has won 13 large deals, with a TCV of $2.7 billion, including the recently closed Stater deal with ABN AMRO. Infosys has won three deals each in Financial Services and Retail verticals, two deals each in Communication, another Utility Resources and Services and Manufacturing vertical, while one deal was in Life Sciences.

Infosys has bagged eight deals from America, four from Europe and one from Rest of the World.

Infosys’s Financial Services business team faced some challenges due to merger and acquisitions in some U.S. banks and also in capital market business in Europe and U.S.

Infosys said there are growth opportunities in consumer, corporate and commercial banking, costs and payments and wealth management, driven by digital transformation and technology modernization.

Infosys achieve growth in retail due to large deal wins, opening new logos and differentiation on digital deals. Retail companies are accelerating their spending towards digital, IT simplification and modernization to improve customer experience.

Infosys won large deals in Communication segment. Infosys is already working with its customers in advanced IoT used cases. Infosys is considering 5G investment as a growth area for its Communications team.

Utilities are spending towards customer experience and digital transformation. Resources are spending towards BPO, IT and ERP upgrades.

Infosys said its manufacturing business unit is expecting impact from trade wars especially in Europe with cost cutting initiative being in place in multiple clients. Customers are looking towards digitalization of end-to-end processes with a strong focus on leading mobile, IoT and backend system simultaneously to provide a superior customer experience.

Life Sciences segment is impacted due to cost cutting initiative like clients due to revenue pressure.

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