Date:13/10/2005 URL: http://www.thehindubusinessline.com/2005/10/13/stories/2005101302080400.htm

Back Infosys bets on delivery model

Our Bureau

Bangalore , October 12

INFOSYS is betting on its global delivery model to maintain its growth, wherein it doesn't foresee any major improvement in technology spending in key markets such as the US and Europe.

"Tech spending is not going to go up dramatically," said Mr Nandan Nilekani, Infosys CEO, commenting on the outlook on the sidelines of the earnings announcement. "Infosys has innovated a new way of delivering IT services, which is faster, better and cheaper for our customers. This is why, even if the IT spending does not go up, we will be able to grow at more than 30 per cent," he said.

Infosys' global delivery model and the superior quality of service have put enormous pressure on the legacy players and this is leading to major transition in the marketplace, he said.

Mr Nilekani said the growth for the company will be broad-based going forward across verticals such as financial services, pharmaceuticals, oil and gas, communications, manufacturing, retail and across industries among others. "Pricing is very comfortable, and we are seeing an upward bias. New business is coming in at higher prices, which should help us to keep margins steady," he said.

Commenting on the possibility of employee takeover in the upcoming deals, especially in Europe, Mr Nilekani said the company had looked at employee takeover, but but not on a large scale. "There are lot of deals in the world today which don't require employee takeover. We are quite comfortable that way and our pipeline is quite adequate to meet our growth projections," he added.

Meanwhile, Infosys has seen an over 50 per cent growth in its billable software employees over the last one year. Infosys' billable employees stood at 38,541 during Q2 this year compared to 24,977 in Q2 last year. However, the company has been projecting a 30 per cent growth.

Commenting on the disconnect between employee growth and revenue projections, the Infosys CFO, Mr Mohandas Pai, said that the company was focussed on creating capacity.

"We have to have capacity. As we grow, we are working on 15 verticals and horizontals and in 10 different locations in India and overseas, which needs capacity," he said.