Capgemini calls Infy bid issue market speculation

Capgemini calls Infy bid issue market speculation
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First Published: Sun, Jul 01 2007. 04 03 PM IST
Updated: Sun, Jul 01 2007. 04 03 PM IST
PTI
New Delhi: Capgemini, the European software and consultancy services company in which India’s second largest software exporter Infosys Technologies is reported to be interested, on 1 July discounted the issue as “rumour and market speculation”.
“We do not comment on market rumour or speculation”, a spokesperson of Capgemini told PTI.
Infosys and Capgemini shares have been rising at the bourses over the rumoured bid by the Bangalore-based company.
Last week, Infosys CEO Krish Gopalakrishnan who had neither confirmed nor denied the rumours had said: “The nature of rumours is such that some of them are right and some of them are wrong... you don’t know which one is right. It’s not possible to comment on rumours floating around.”
Leading IT research firm Ovum said the speculation that Infosys is interested in acquiring Capgemini is far-fetched.
“Even on the scale of IT services takeover rumours, this is a pretty far-fetched one in our view. It’s true that the Indian majors are aware of the strategic need to grow their onshore capabilities and higher value and longer-term service lines. Capgemini might, on paper, fulfil both requirements for Infosys,” the firm said in its daily comment.
But in reality, Infosys has been growing at 40% and has operating margins at just under 30%. While growth may be a little slower this year than last, it remains a sensational organic grower and profit generator, Ovam said.
Infosys operating margin stood at 31.73% in the fourth quarter ended March 31 and Capgemini’s were a weak 5.8%.
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First Published: Sun, Jul 01 2007. 04 03 PM IST