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Infosys’s growth is being driven by digital, large deals, expansion of existing accounts, and mining new accounts, CEO Salil Parekh said.mint (MINT_PRINT)
Infosys’s growth is being driven by digital, large deals, expansion of existing accounts, and mining new accounts, CEO Salil Parekh said.mint (MINT_PRINT)

Infy lays down new blueprint for growth

  • Firm set to scale digital capabilities, reskill staff, boost local hiring

Infosys Ltd chief executive officer Salil Parekh has laid down a strategic blueprint for the company built on four key pillars—scaling digital capabilities, deepening automation and artificial intelligence (AI), reskilling employees, and increasing local hiring.

As part of its localization strategy, Infosys will hire 12,000 American workers over the next two years, creating a 25,000 strong local workforce in the US over five years. In 2017, Infosys committed to hiring 10,000 American workers over two years and has exceeded that goal by creating 13,000 jobs in the US to date.

Infosys’s growth is being driven by digital, large deals, expansion of existing accounts, and mining new accounts, Parekh said at a virtual analyst meet on Wednesday.

The company signed over $5 billion worth of large deals since the second half of March and most of these were new deals with a digital share of over 50%.

The covid-19 pandemic has accelerated the digital revolution and led to a massive shift in the way technology is being used, Infosys chairman Nandan Nilekani said.

Some of the technology trends that have emerged during the crisis are consumerization of apps, acceleration of open source platforms, adoption of cloud, rise in data and analytics, cybersecurity, digital platforms, and modernization of legacy systems, Nilekani said.

“These trends existed before covid but the crisis accelerated it…Companies began to realise that unless they were digitally savvy, their business was at risk," Nilekani said.

Infosys’s digital revenues grew 25.4% year-on-year in constant currency terms to $1.57 billion and contributed 47.3% to the total revenues for the September quarter.

In July, Infosys won a large digital transformation deal pegged at $1.5 billion from US-based investment management firm Vanguard. “The overall deal pipeline continues to be strong…A significant part of large deals will be in the range of $150 million," said U.B. Pravin Rao, chief operating officer, Infosys.

The Infosys management said the company saw a significant growth in large deal pipeline led by cloud infrastructure deals, full stack vertical platforms, and alliances and partnerships. As part of its organic investments in cloud, in August, Infosys launched Cobalt, an integrated cloud offering that helps businesses build new cloud-first capabilities to create seamless experiences across different cloud platforms.

The key drivers to improve Infosys’s margins include the right onshore-offshore mix, automation, subcontractors, and digital value, Parekh said. All these factors have helped Infosys achieve a 25.4% operating margin in the September quarter. It has also raised its FY21 guidance for operating margin to 23-24%.

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