1. Infosys CEO Vishal Sikka: Downward pricing pressure to stay but firm to focus on AI-led services to grow business

Infosys CEO Vishal Sikka: Downward pricing pressure to stay but firm to focus on AI-led services to grow business

Infosys Ltd on Friday said the downward steady pricing pressure upon the Indian IT industry and on the company is here to stay going into the fourth quarter of the current financial year 2016-17

By: | Published: January 13, 2017 12:18 PM
The company foresees an increasingly AI-led (artificial intelligence) future. “This embrace of AI and automation in improving our operational efficiency and new solutions to drive business,” Vishal Sikka said. (Reuters) The company foresees an increasingly AI-led (artificial intelligence) future. “This embrace of AI and automation in improving our operational efficiency and new solutions to drive business,” Vishal Sikka said. (Reuters)

Infosys Ltd on Friday said the downward steady pricing pressure upon the Indian IT industry and on the company is here to stay going into the fourth quarter of the current financial year 2016-17. “One significant thing we saw in this quarter (Oct-Dec) was the continued pricing pressure,” Infosys CEO and MD Vishal Sikka said at a press meet after the company announced its third quarter results. Infosys’ ‘revenue productivity per employee (RPP)’ in the Oct-Dec quarter fell 1.1% on-quarter and 3.3% on-year. Further, for the nine months to December, RPP fell 1.7%, Sikka said, adding that this clearly shows the pricing pressure is here to stay “as I have been saying for the last two-and-a-half years.”

However, Infosys’ absolute ‘revenue per employee (RPE)’ at the company level rose to $51,900 due to its focus on automation, operational efficiency and agility in hiring, Sikka said.
“We continue to focus sharply on the execution of our strategy, as reflected in the growing embrace of AI-based automation, growth in our new software-led business, delivering innovation, both incremental and breakthrough and fostering a learning-led culture,” he said.

The company foresees an increasingly AI-led (artificial intelligence) future. “This embrace of AI and automation in improving our operational efficiency and new solutions to drive business,” Sikka said.

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Earlier Friday, Infosys reported its consolidated net profit for the third quarter of the current financial year 2016-17 rose 2.3% on-quarter to Rs 37.08 billion, beating most analyst estimates and sending shares soaring. Its consolidated revenue for the Oct-Dec quarter was almost flat at Rs 172.73 billion, down 0.2% from the previous quarter. However, despite the strong showing of the third quarter financial results, the company lowered its full fiscal 2016-17 USD revenue growth guidance to 7.2-7.6% from 8.6-9%. It narrowed the band for the full year constant currency revenue growth guidance to 8.4-8.8% from 8-9% earlier.

The company, in the third quarter, saw a good growth in all its new areas of business. “All four of our new dimension of software-led services have seen best quarter ever,” Sikka said.

Going forward, the company sees all its vertical bouncing back, except that for Energy, the COO U B Pravin Rao said, while Sikka said he “bullish” on BFSI.

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