Infosys to meet lower end of revenue guidance: Shibulal
P K Balakrishnan, NDTV, 26 Nov 2011 | 07:46 AM
S D Shibulal
Infosys(Co-Founder, Chief Executive Officer, Managing Director)
Also known as Shibu, he is the Co-Founder and the Chief Executive Officer and Managing Director of Infosys. Prior to becoming the CEO and Managing Director, Shibu served as the Chief Operating Officer between June 22, 2007 and August 20, 2011.
Interview transcript
With Infosys receiving more than 60 per cent revenue from US, the company’s managing director S D Shibulal is concerned about the slowdown in US economy, especially in the decision-making process of US corporations. He said, in an interview to NDTV Profit, that there is a serious lack of confidence and large investments are being reviewed or taking longer. Hence, despite a near 20 per cent slump in the rupee value, he believes that the company would achieve lower-end of the revenue growth guidance.
Now the situation has deteriorated. The challenges are unemployment in US; the euro zone has issues; there is currency volatility all around and that is an issue with our clients.
- Do you think your recent earnings announcement will cheer the markets with the aggressive guidance that you gave now; looking back it looks a little ambitious. What has changed during that period?
- If you look at our last quarter, it was a quarter of all round growth. When we gave the guidance, we gave a big range of 3.2-5.4 per cent growth. On quarterly basis, we are very cautious. When we enter a quarter, we only see about 90-93 per cent of the revenue as the remaining revenue is caught up during the quarter, in normal situations. Our guidance reflected the caution which we had, by having such a wide range. Now the situation has deteriorated. The challenges are unemployment in US; the euro zone has issues; there is currency volatility all around and that is an issue with our clients. There is a serious lack of confidence, so decisions are being delayed; large investments have been revisited; larger deals are taking longer time to close and that is reflected in the comments that we made.
- But looking back at it, do you think you should have been more conservative given most of these factors were there even a month back. Have those things changed?
- Situation has deteriorated after the guidance over the last 45 days. So at the point of guidance, looking at the facts, our visibility of revenue was somewhere between 93-95 per cent. The guidance was given based on that; but we were very cautious.
For the full year, the range we have given is 17.1 to 19.1 per cent. So based on where we end up, including the three quarters, we'll be somewhere in at the lower end.
- Where do you expect to end up in terms of revenue growth guidance after the third quarter?
- We will be closer to the lower end of the guidance.
- If there are no major macro environment changes, are you confident of beating it?
- For the full year, the range we have given is 17.1 to 19.1 per cent. So based on where we end up, including the three quarters, we'll be somewhere in at the lower end.