30th Sept, 2011
“Acquisition forefront, the company has acquired Gen-I Technology of New Zealand in Q1FY’12, giving the company ready access to 3,300 of Gen-I’s clients (BFSI, Energy, Sovereign, Healthcare & Rural) in APAC region. The transaction has been completed and will see an impact on the revenue by Q2FY’12E by close to USD12 mn. Moreover, the company is in an advance stage to buy an US company in the public services & healthcare space which has a turnover of USD300-350 mn. The buy price for that firm could be anywhere between USD450-650 mn. This will be a very big step for Infosys; public services and healthcare especially is an area where its competitors such as Cognizant & TCS have been very strong. Hence, it is certainly an area where Infosys will also like to gain strength and we believe this will strongly rationalize the revenue segregation.”
“Seemingly alarming impact of INR depreciation on earnings is actually polarized by the IT services sector. Also, there are meaningful gainers, like Infosys, from the depreciation of INR against major currencies. All three IT services firms under our coverage will get big positive impact from INR depreciation, and is expected to emerge gainers. The sensitivity of the revenues of firms like Infosys stands at 40-50 bps of benefits (Q2FY’12E) & 100-200 bps (FY’12E) per ~1% depreciation of INR. The INR depreciation (if it sustains) could help in off-setting price pressure, which the industry may face going forward. Moreover, cost-rationalization approach by Infosys) using the US$/` rate, which currently stands at `49.16/US$ and expected to ravel through `47/US$ by Nov’/Dec’ FY’12) will greatly benefit in the present times of global uncertainty. The company can garner more from its off-shoring activity and US$ denominated contracts,” says R K Global research
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