Infosys CEO: Robust Growth to Taper Slightly

 
 
By Stan Gibson  |  Posted 2006-04-14
 
 
 

On the heels of a strong fourth quarter, Infosys CEO Nandan Nilekani said his company will continue to grow at a robust, yet slightly slower rate.

In its fourth quarter, Indian outsourcer Infosys posted revenue of $593 million, representing a year-over-year growth rate of 35 percent.

In an interview, Nilekani said the company will grow at a rate of 28 to 30 percent in the coming year.

Operating profit declined 3.3 percent, compared with the third quarter.

Infosys officials cited appreciation of the rupee and more rapid hiring than anticipated as the main causes.

Infosys tallied $2.15 billion in revenue for its fiscal year; Nilekani said that the company will pull in as much as $2.8 billion next year.

Pointing out how far his company has come in recent years, the CEO noted, "It took us 23 years to do a billion [dollars in annual sales]. We then did next billion in 23 months."

To handle the red-hot pace of contract signings, Infosys will hire 25,000 people this year, up from 22,868 last year, Nilekani said.

With that many new employees flooding into the company, Nilekani called human resources and logistics—selecting and training employees and making sure the companys infrastructure can support them—core competencies of his company.

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Most of the new employees will go to work on either application development or ERP deployment projects, he said.

Almost all the employees will be hired in India, with up to 3 percent hired in other countries, said Nilekani.

He noted that Infosys is hiring 300 U. S. university graduates and will train them in India before sending them back.

He said Infosys has no plans to grow via large acquisitions, but may acquire smaller companies, targeting specific technology or industry skills.

Although Computer Sciences is looking for an acquirer, he said Infosys is not interested.

"For us, buying a large company would be out of the question. That would contaminate our business model."

Nilekani said he expects most growth to occur among banking, health care and telecommunications companies.

He said growth among European customers is also increasing rapidly and is now about 25 percent of Infosys revenues, up from 9 percent seven years ago.

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