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Coming Soon: A New Infosys

Author: Administrator Account/Tuesday, February 23, 2010/Categories: Stocks

Coming Soon: A New Infosys

The IT major Infosys’ annual analyst day was marked by its focus on newer businesses such as digital technologies, while at the same time also focusing on renewing its existing business lines, through newer delivery models.

The new CEO Vishal Sikka alluded to Infosys’ focus on frameworks like design thinking, artificial intelligence (AI) and automation to reduce manual effort. The company is also focusing on increasing sales force apart from raising headcount in key areas like big data, analytics, infrastructure management (IMS), security and cloud.

The IT major has trained over 8,000 entry-level employees and over 160 senior-level employees on design thinking. In our view, the focus on newer and emerging technologies, while at the same time not losing focus on existing lines of business is a positive. Infosys has already had a disappointing experience when it had tried to implement ‘Infosys 3.0’, which, while in our view a credible strategy, it was in the execution where the IT major failed, as it lost focus on traditional bread-and-butter businesses and did not see great traction in newer services, as the business environment at the time was not encouraging enough.

Infosys is focusing on increasing its sales force and raising headcount in areas like big data and analytics (59%), IMS (31%), security (22%) and cloud (13%). From an immediate-term perspective, 3QFY15 is likely to be a soft quarter on seasonality and furloughs in manufacturing and hi-tech, apart from softness in retail. Regards likely IT spend trends for CY15, Dr Sikka alluded to slowness in retail, telecom and life sciences.

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