Infosys CEO Vishal Sikka is upbeat about the company’s second quarter growth, but does not rule out a revision in guidance for the IT major. According to a CNBC-TV 18 report, Sikka told analysts at the JPMorgan Investors Summit that the company will see better growth in Q2 as compared to Q1. “We see that our Q2 growth is going to be higher than the Q1 growth, but we do see risks that would get us on the trajectory of downwards revision of guidance, because the atmosphere during the course of Q2 has worsened, compared to what we saw in the beginning of Q2,” Sikka is reported to have said. Sikka reportedly said that the problems with execution which dragged the revenues down by close to $22 million in the first quarter of FY17 have “pretty much” been resolved.
Talking about his strategy, Sikka said, “Our aspiration is obviously consistent profitable growth and we don’t want to abandon that. But, I am not in favour of some of these ideas around dramatically lowering costs to artificially improve growth and then making the margins suffer. We don’t believe in doing that.” Sikka also pointed out that the company has made significant progress in stemming attrition and the focus over the coming days would be on retaining high performers across strata, the channel reported.
Watch: Infosys upbeat about Q2
The company however continues to battle big challenges such as slow momentum in the BFSI sector, general industry pressures in the manufacturing and retail sector and client-specific issues in Europe region, the channel pointed out. Last month, RBS had said it will no longer pursue its plan to separate and list a new UK standalone bank, Williams & Glyn (W&G). Infosys was the W&G programme technology partner for consulting, application delivery and testing services. The ramp down had reportedly affected 3,000 staff, but the IT major had assured that it would be able to adjust its employees in other projects.
Sikka’s statements come at a time when the IT sector has turned cautious about its growth prospects. Recently, TCS, the country’s largest IT services exporter, struck a cautious note with regards to its coming quarters. TCS has characterised customer outlook “as one marked by abundant caution”. The IT major has said that delay in spending impacts the banking and financial services sector. This causes sequential loss of growth momentum, the company has said.