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Despite Of Larger Deals Infosys Grow On A Slower Pace Email this page
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BANGALORE: One of the leaders in IT-Sector Infosys growth seems to be at a slower pace for the financial year 2015 when compared to other industries reports Malini Bhupta from Business Insider. According to Nasscom the software exports were expected to grow nearly 13 percent to 15 percent in India for FY15. But India’s second largest exporter Infosys has given a guidance of revenue growth which ranges from 7 percent to 9 percent in FY15.
It seems that even the return of the co-founder Narayan Murthy as executive chairman, has not affected the revenue growth of the company much. Apart from a few minor changes like removal of volatility in earnings, no major changes have taken place to affect the revenue growth. The company’s revenue growth is expected to be 5.6 to 7.6 percent when calculated on the basis of rupee terms.

Yes! Indeed Infosys have closed four large deals of contract value worth $700 million and also few are in the pipeline. But due to the extended decision cycles, the company is not growing on a faster pace said D Shibulal, the CEO of the company. Again according to Nasscom this is a variable behavior. In FY14, the company had a revenue growth of 11.5 percent at $8.24 billion which was not up to the mark of the promise made by the company as the revenue growth declined by 0.4 percent to $2.09 billion with a net profit up to 5.2 percent. But this time in FY15 the company has not over delivered anything, instead it has stuck to its promise of under delivering in the fourth quarter.

A company’s revenue growth depends on factors like segments and geographies. In case of Infosys, the company has remained stable both in terms of segments and geography. The margin expansion of the company was one of the notable differences during this quarter. The operating margins rose to 25.5 percent from 50 basis points and there was increment in dividend payout ratio which was 40 percent of the post-tax profits.

As promised by Narayan Murthy in 2013 the tightening costs resulted in better margins over the last three quarters, but the margins seems to be declining in coming future. Thus the company needs to improve a lot in terms of its growth to compete with other industries.

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