Better forecast for 2106-17: Infosys hopes to grow better in 2016-17, forecasting dollar revenue to grow for the year ahead between 11.5% and 13.5% in constant currency and 11.8% and 13.8% in March 2016 exchange rates. Typically, Infosys is conservative which believes in the motto of under promise and over deliver. This would mean that Infosys has factored in challenges, in any, in the coming months to forecast higher revenue, better than the industry projections of 10-12% by Nasscom. The revenue projections by the Bengaluru-based IT bellwether is higher on the lower end than its smaller rival Cognizant, which had projected revenue growth 9.9-14.3 percent in February.
More fixed price contracts: Infosys has increased fixed price contracts to 45.1 % from 42.1% of revenue a year ago. The increase reflects the company's focus on using automation to improve productivity without adding substantial number of people on these projects. The increased automation also allows Infosys to increase margins without adding headcount, while upskilling engineers to provide consultancy to clients. In the fourth quarter, net people addition stood at 661, amongst the lowest in recent quarters.
Red flag in BFSI vertical: Over a third of India's software services revenue comes from banking, financial services and insurance vertical. It is the same for Infosys and the company has seen business from insurance sector coming down in the last year. US banks, the biggest technology spenders globally in fact are expected to increase spending in technology this year, but mainly to enhance security, a segment Infosys and Indian IT services firms have less expertise. CEO Vishal Sikka's strategy to overcome this challenge is to been seen in the coming quarters.
More people focus: In January, Sikka claimed that one of his personal achievements in his role at Infosys was the improved working atmosphere for employees. The people focus steps that Sikka has brought in is also being reflected in the way he has elevated key executives. S Ravi Kumar, chief delivery officer, Sandeep Dadlani, global head of retail and Mohit Joshi, head of financial services have been elevated to the roles of President, which have been specifically created for them. With this move, Sikka is telling the company's employees that performers would be rewarded. He has also brought down attrition, a concern that he has been able to address.
Bigger, better deals: Infosys is seeing larger multi-year deals from clients such as ConAgro Foods and Welsh Water, with whom it is able to push its automation projects while delivering improved productivity to customers. It also has been able to get more customers - 125 for Infosys automation projects, which reduces dependency on people for repeatable task and enables it to deploy them for higher margin consultancy roles.
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