Bangalore: Infosys’ chief executive officer S. Gopalakrishnan, who warned of significant challenges in the short term, spoke to Mint on the year that was and the year ahead. Edited excerpts:
How short is the short term?
It is difficult to say. At this point of time we believe that second half will be better than the first half, but we will have to wait and see. Growth will slightly skewed towards the second half.
Future tasks: Infosys CEO S. Gopalakrishnan. (Photo: Hemant Mishra/ Mint)
How do you rate the current situation compared with that of the slowdown in 2001?
It’s not the same. In 2001, the Internet companies and telecom were affected. Right now, it is impacting much larger number of companies and larger industries. Ultimately banking is the backbone of any economy.
Revenues from banking, financial services, and insurance (BFSI) companies fell by 3% during the quarter. Do you see any downside to that or the decline is limited to the current level?
At this point we believe that we have seen the impact and some recovery has already started as companies have restructured.
Were there any project cancellations in the BFSI segment?
No, not actually in the BSFI. There were about three to four cancellations out of the 5,000 projects we executed, which happened in transportation and pharma.
Do you expect that non-BFSI sectors such as telecom and manufacturing to drive the growth this year?
BFSI will also drive growth.
How many of your clients were exposed to the subprime crisis?
Most of the financial institutions were affected because of the credit crunch. This affects the entire sector. Except for handful of companies, most of the companies have been affected. The credit crunch is because companies are not willing to lend money.
How’s the impact of subprime outside the US, where you have relatively lesser presence?
Recession is affecting everyone and our survey indicates that budgets of majority of the clients are affected.
Clients are saying that once they get a grip on what’s happening, they’ll send more work to India.