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Salil Parekh on how Infy beat TCS' growth rate in Q1

July 29, 2019 10:03 IST

'Our focus has been on what our clients want.'
'We are building a company that is going to be ready for the next 5-10 years.'
'The most critical thing is that we should be a respected organisation.'
'Clients are beginning to look at Infosys as an entity that has the right skills and capabilities.'

In his second year at the helm, Infosys CEO & MD Salil Parekh looks optimistic about the company’s growth prospects.

 

With stability back in the industry, Parekh, in an interview with Bibhu Ranjan Mishra and Debasis Mohapatra, says turbulence is over and Infosys is on its way to regaining its old glory. Edited excerpts:

This is your second year at Infosys, and you had a good run in past few quarters in terms of TCV (total contract value) of deals signed. Are you comfortable now?

In the first year, I was out of the country for almost three weeks of every four, just to meet clients and to drive new initiatives.

Now there are other things to be looked at.

Internal factors had been a major drag on Infosys in the past. Is that phase over now?

I have never felt that there is any internal risk.

The strategy is clear. The leadership team is motivated.

We have a good traction in the market.

The clients are positive with us and we have seen some level of stability.

So, from a business perspective, we feel comfortable where we are going and first-quarter growth is testimony to that.

Can you say that stability is back and no further hiccup is expected?

There’s a clear level of attention and focus. There is a lot of stability in the business today.

We are building a company that is going to be ready for the next 5-10 years and not just stay focused on the short term.

A lot of investment we have made in leadership, employees, reskilling, share plan, etc. are geared towards how we build the company, which in the medium term is going to be successful.

In Q1 of FY20, your growth rate was better than even market leader TCS. What went into it?

Our focus has been on what our clients want.

That's why my travel has been a bit intense in the first year.

It’s because there are a lot of changes happening with the clients.

So, what are the things they are trying to do?

Look at a consumer products company, or a bank, or a utilities firm.

They want to cater for their digital-savvy customers, whether through mobile apps, or data, or cloud.

Those are the areas where we started our investment.

Clients are beginning to look at Infosys as an entity that has the right skills and capabilities to help them in their digital journey.

You had strong deal wins in the last financial year as well as in the first quarter of 2019-20. Are you seeing the same tempo continuing in the rest of the financial year?

We had a number of large deals with TCV of $ 2.7 billion last quarter.

Large deals are always bumpy. In some quarters they will be high and in some low. But, overall the pipeline is growing.

So, if you look at a 12-month period, it (TCV of large deal wins) will be good.

Last financial year, TCV was around $ 6 billion, and, I think we will have a good FY20.

How do you want to position the company in the long run?

The founders built this company over the past 30-40 years and it is hugely successful.

If you look at how the company started, the most critical thing is that we should be a respected organisation.

And that’s what we wanted to be known for in the future as well - respected by the clients, the investors, and the employees.

That’s a way we look at it.

With revenue growth coming back, will Infosys now focus more on margin improvement?

Margin improvement is an ongoing focus area.

We have a lot of levers and (given a margin) guidance of 21-23 per cent.

We will be able to meet that guidance for the year, using levers such as utilisation, team structure and sizes, and pricing.

Focus on improving utilisation may lead to attrition, which is already high. How do you look at it?

Last financial year, we recruited more than 40,000 people.

We have tightened our performance measures, which is adding to attrition.

Also, our attrition includes numbers from each of our businesses including BPO whereas some other companies only talk about their tech business.

We have several measures in place to contain those - better training programmes, reskilling initiatives, and creating exciting onsite opportunities in places like the US, Canada, Mexico, Europe, and Australia.

Photograph: PTI Photo

Bibhu Ranjan Mishra and Debasis Mohapatra
Source: source
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