NDTV Profit

Infosys Open to 'Bigger Scale' Acquisitions: CEO Sikka

Infosys, India's second largest IT services firm, is open to 'bigger scale' mergers and acquisitions but with a caveat, it is not interested in "yesterday's" companies.
EMAIL
COMMENTS
File photo of Infosys CEO Vishal Sikka
File photo of Infosys CEO Vishal Sikka

New Delhi: Infosys, India's second largest IT services firm, is open to 'bigger scale' mergers and acquisitions but with a caveat, it is not interested in "yesterday's" companies.

The Bengaluru-headquartered company, that was once the bellwether of Indian IT industry, also says it is primarily interested in taking over innovative companies and in areas like automation and artificial intelligence.

Infosys CEO Vishal Sikka, who was brought from German software major SAP last year to revive the company's fortunes, also laughed off suggestions that Infosys itself can be acquired.



"We are here to acquire others and not be acquired... Certainly not till I'm here," he told PTI in an interview.

"We are open to mergers and acquisitions and we would love to acquire companies that are innovative. We are looking at companies worldwide, everywhere. There are some areas where you can bolster yourself geographically and so on."

"The main point is that I have no interest in acquiring yesterday's company (technology-wise) just because it adds to the revenue number or to the bottom line and so on," he said.

The first non-founder CEO of the over $8-billion IT services exporter said that the firm is looking at acquiring smaller companies, but is open to bigger ones as well.

"We are interested in acquiring smaller companies, although you never say no to something that makes sense and a bigger scale as well. Primarily the interest is in smaller companies, innovative companies. These areas that I mentioned automation, artificial intelligence.

"Lots of new thinking, new kinds of application. Wherever productivity improvement can be achieved by bringing people together with technology.. so amplifying people's ability with technology," Mr Sikka said.

Infosys is also interested in new areas of collaboration, he said, adding, "I think this onsite-offshore needs to be rethought around the power of technology, design technology. These areas we are looking forward to and acquiring."

Previously also Mr Sikka has reiterated that Infosys will look at firms working on "technologies of tomorrow" like artificial intelligence and automation for acquisition.

So far Infosys has made no acquisitions under Mr Sikka, since he took over the helm of affairs at the company in August last year.

In January 2012, Infosys BPO acquired Portland Group, a strategic sourcing and category management services provider based in Australia for $41 million.

In October of the same year, it acquired Zurich-headquartered Lodestone Holding for a cash consideration of $219 million and an additional consideration of up to $112 million.

In December last year, Mr Sikka had said Infosys's key focus is its organic growth and "renewal from within", but the firm believes that it is necessary to complement this with an active inorganic strategy also.

"We are also looking at underpenetrated segments as well as some geographic regions but not only from the perspective of just buying services companies in those areas but looking at innovation that can be brought with that focus," he added.

Mr Sikka was brought to Infosys following a laggard financial performance by the company. He has been put in charge to get the firm back on a high-growth trajectory at a time when peers like Tata Consultancy Services (TCS) and HCL Tech were outperforming Infosys.

The company's recently announced third quarter (October-December) earnings are reflective of his efforts.

Beating expectations, Infosys reported a 13 per cent jump in consolidated net profits for the third quarter to Rs 3,250 crore, helped by increase in business and clients from North America, as also from India.

The firm's consolidated revenue rose 5.9 per cent to Rs 13,796 crore in the quarter ended December 31, while it maintained its revenue outlook for the entire fiscal ending March 31.

In dollar terms, Infosys posted a 12.7 per cent jump in net profit to $522 million, while revenue was up 5.6 per cent to $2.21 billion in the third quarter.

Infosys also said it has expanded its innovation fund from the $100 million to $500 million, which will be used to invest in young firms worldwide.

Of this, half or more than Rs 1,500 crore will be invested in India's young companies which are innovating in next generation solutions and technologies like automation, pervasive connectedness, artificial intelligence as well as collaboration and design technologies.



For latest news on Business, like us on Facebook and follow us on Twitter.
ALSO READ Government, TRAI Discuss Policy; IMG Brainstorms On Telcos' Demands

Advertisement

Advertisement

GAINERS / LOSERS

Advertisement

Advertisement