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Infy clinched $2.9-bn new deals in past four quarters

Demand for cloud, infra services drive contracts

Apurva Venkat  |  Bengaluru 

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Infosys, the country's second largest information technology services company, saw the worth of new contracts in the past four quarters jump 53.7 per cent to $2.9 billion, driven primarily by deals in cloud and infrastructure services that it won from larger global peers. In the preceding four quarters, the deals it won were $1.9 bn, said a note from JM Financial Institutional Securities, after last week's analysts' meet at the Bengaluru-based company. However, the Infosys management also said it was seeing project ramp-downs, while signing of new deals was slow due to the global economic uncertainty. "Average revenue per top-10 clients also has significantly increased and in Q4 of last year, again our growth in the top-10 and top-25 accounts was much higher than the Infosys average growth. These are all parameters which clearly say that some of our strategies are resonating well and our level of engagement with most of our top and strategic clients are improving in the past six to 12 months," Pravin Rao, operations head, told analysts. Adding: "Particularly if you look at the significant percentage of large deal wins in the areas of cloud and infrastructure services. There, it typically comes from global players who are probably incumbents for the past five-10 years.

In other areas, we have enough evidence of having won against India-based players as well." Chief executive Vishal Sikka is scripting a new path for Infosys, pushing the company to adopt automation and deliver higher value services to global clients. He's also facing new challenges -RBS has shut projects and deals are slowing with the economic uncertainty from Britain's decision to move out of the European Union. Infosys has revamped the customer management to enhance sales productivity. "The company is also using software efficiently to find out blind spots in its offerings to a client, point out any potential risks in a client portfolio. A separate sales team has been put together to exclusively sell the new (product, platforms, etc) offerings to clients," JM Financial analysts Pankaj Kapoor and Abhishek Kumar wrote in the note. Also, it is increasingly focusing on process automation, rather than task automation. This initiative has so far focused on fixed price projects and helped it release 3,200 people from existing offshore based fixed-price projects in FY16 and 2,000 in the first quarter of the current financial year. However, the impact on overall reported revenue/employee has been limited, as only 16 per cent of the company's wage bill is offshore. "Infosys expects a more visible impact on revenue per employee as it starts to release people from onsite/time & materials projects and move people up the pyramid using automation," Kapoor and Kumar wrote.

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First Published: Thu, September 01 2016. 00:45 IST
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