Technology major Infosys on Thursday said the company does not see any adverse impact from the European debt crisis.

“We have not seen any project cancellation on account of the recent debt crisis. Euro remains structurally weak and it may take a long time to stabilise. However, we are concerned over the macro situation unfolding in Europe,” V Balakrishnan, chief financial officer of Infosys Tech said.

At the moment, Europe contributes nearly 26 per cent of Infosys’ total revenues.

On the currency front, Balakrishnan said the Euro-Dollar parity is going to adversely impact the revenues for Infosys and the company is taking a short term hedging exposure due to currency volatility.

Here is a verbatim transcript of an exclusive interview with V Balakrishnan, CFO of Infosys Tech on NDTV Profit.

NDTV: How large a concern is Europe for you at this stage? Have you done any impact analysis?
Balakrishnan: Europe is a concern because today our 26 per cent revenue comes from that region, of course majority from UK. We also get large revenues from countries like Switzerland and to some extent France and Germany. We don’t have big exposure to countries where the exposure is. Europe as a zone is becoming more concerning and we are closely watching out what’s happening in Europe, as it could become a larger issue. Right now we are not saying much impact on the ground and we are not talking any projects cancellation.

NDTV: So what’s the impact of currency volatility?
Balakrishnan: Yes, depreciation in Euro and British Pound (GBP) will impact revenue growth in dollar terms and it could also impact to some extent on margin side. But the positive thing is that rupee also depreciated against dollar, so to some extent it will offset some debt impact. Of course currency is a big worry now and we are closely monitoring it. We do take a short term view and hedge our risk but you can’t eliminate the risk, only you can reduce the impact.

NDTV: Any hedging changes you have made to protect against the volatility?
Balakrishnan: No we are because as we said earlier in a volatile currency situation you don’t take a long term view and you try to hedge your exposure in short term and minimise the impact so we continue with the same policy.

NDTV: On the ground in Europe …is clients' spending still picking up?
Balakrishnan: Yes, Europe is still spending large money and we are seeing very good growth coming from there. But they are still cautious about the environment because there are too many event related risk across the world where Europe is still a mess. There is some cautiousness in the spending but overall customers are comfortable.

NDTV: Are you sticking to your guidance... the market had assumed you would easily beat it by 10-15 per cent?
Balakrishnan:  I can’t comment on what the market expect as we have given a guidance and we are very comfortable about achieving it. If there is a risk in the guidance we will always come and update. We are closely monitoring the situation in Europe and if it becomes a larger issue then it could have some impact. The flip side is if the economy is more challenged probably that could outscale the offshoring and outsourcing.

NDTV: If the situation worsens and you see spending getting affected...you will not hesitate to give a mid qtr guidance update?
Balakrishnan: No everything is possible today and we are living in a very volatile environment. We are not seeing any concerns emerging and we have given a guidance which we are comfortable achieving it.

NDTV: Just give us a break up in terms of revenues from Europe broadly and then southern European nations where there are debt issues?
Balakrishnan: Nearly 26 per cent of revenue comes from Europe, 14-15 per cent from UK, 5-6 from Switzerland and 1 per cent each from Germany and France. So, there are hardly any revenues coming from all these problematic countries.

NDTV: On the flip side, with Euro and the Pound taking a big cut, will Indian firms like Infosys who are sitting on large cash reserves look at buying companies there?
Balakrishnan: Well it could be but at the end of the day it not only about valuation, it is about strategic fit.