Infosys working to lower dependence on US deals
Infosys' United States clients say they will increase their offshoring budgets if the latter's economy slowed down.business Updated: Aug 29, 2007 17:33 IST
Software services exporter Infosys Technologies Ltd is lowering its dependence on US customers through faster growth in other markets, but is not yet seeing a slowdown in US deals, its chief executive said on Wednesday.
S Gopalakrishnan also told reporters that while the business environment is more positive in Europe than the United States, US clients were saying they would increase their offshoring budgets if the US economy slowed down.
And India's second-largest software services exporter could raise billing rates by 3 to 4 per cent for new contracts and 2 to 3 per cent for existing contracts, he said.
"From a geography perspective, Europe seems to be positive, Australia is also positive," Gopalakrishnan said.
This was partly because Infosys was investing in those markets and also because these regions were catching up with the United States in outsourcing work. "They have suddenly woken up to the fact they need to become more aggressive in leveraging this globalisation phenomena."
Gopalakrishnan said Nasdaq-listed Infosys would like to see 50 per cent of its revenues coming from the United States, 30 per cent from Europe and 20 per cent from the rest of the world, although this was not a time-bound target. "We are close to that, but not there yet. There are no target dates," he said.
About 60 per cent of the company's revenues come from the United States, while Europe's contribution is 26 per cent and growing rapidly. Gopalakrishnan said Infosys had not seen any slowdown in U. deals for now.
The troubles in the US subprime market have raised concerns that Indian outsourcing firms could lose customers and revenues.
"We're not seeing any slowdown in terms of deals from the US yet, but we have to wait and see," he said.
Infosys beat forecasts with a 35 per cent jump in June quarter profit, but said at the time a rising rupee was squeezing margins.
Operating margins in the June quarter were 24.9 per cent, down from 27.8 per cent in the March quarter.
At 0840 GMT, Infosys shares were down 1.5 per cent at 1,854.80 rupees in a Mumbai market that was up 0.2 per cent.
Shares of Infosys, whose clients include ABN AMRO, Goldman Sachs and Airbus have fallen more than 17 per cent so far this year, underperforming the sector index which has declined more than 14 per cent.