Infosys eyes acquisitions, sees steady margins
Reuters: Infosys (NYSE: INFY) is seeing better times than previous quarter, they are getting slightly higher margin from their clients and are getting more business from Europe which is growing faster. The addition of new customers accounted for 5 % of their revenue. The European business contributed 25 percent of Infosys revenue. Infosys CFO, V. Balakrishnan, The European business is growing much faster than US. The growth (in Europe) is coming from the UK. France and Germany are growing but not as fast as UK.
Infosys is looking to focus on its fast growing European markets so as to reduce its dependence on US markets only. For this it is looking to acquire companies with an annual revenue of $100-200 million for inorganic growth in areas where these companies can come and fill the strategic gaps that Infosys has in either services or geographic or technology area. The depreciating INR also helped to improve the margin a bit. V. Balakrishnan said here were some concerns in the market about a possible slowdown of the U.S. economy, but Infosys saw an opportunity in this. Our take on that is even if the economy slows down to some extent it only accelerates off-shoring. So, that will be good for players like us.
Competitor Wipro (NYSE: WIT) recently made a few acquisitions of its own including buying European based Enabler.