The global economic gloom, which has put a question mark on the future of Indian IT services companies operating in the Banking, Financial Services and Insurance (BFSI) space, is likely to work to the benefit of these firms, said Ashok Vemuri, head of the vertical at Infosys. While recent reports from analysts have sharply pointed towards slowdown in the BFSI space, Infosys is not expecting any major impact, Vemuri said, who also heads the Americas region.
Speaking to FE during the company?s quarterly results announcement, Vemuri stated that both the European and the American economic situation was offering two distinct sets of opportunities to the company, for whom, BFSI constitutes 35% of total revenues. ?US banks will provide opportunity on the revenue side, while in Europe, we expect opportunities on the operations side,? he said.
In case of a possible default by Greece, European banks would get undercapitalised and would have to look for ways to cut operating expenses, which might work well for BFSI IT service providers. The US markets, looking to fill spaces left vacant by European banks, will find a need to drive the revenue side, ?this plays into the areas of business we have been building, like mobility,? Vemuri added.
Late last month, a report from Standard Chartered had stated: ?We believe Bank of America, GS and UBS, with 35,000 combined lay-offs, are $100m+ accounts, with 7%+ revenue share for Infosys. In our recent interactions, Infosys admitted to first signs of slowdown in the BFS vertical over the past few weeks.?
Vemuri however said he was not aware of such indications by the management. He added that the lay-offs announced were predominantly focused on contractors, and closing of branches were not likely soon.
to be affected immediately. ?I don?t give much currency to it,? he stated.
For the second quarter, revenue from the BFSI segment for Infosys grew 4.5% sequentially, on the back of an 8.5% growth in professional services. Total revenues from Americas grew 6%, while its European business was up marginally by 0.8%. With the likelihood of a ?muted? growth from the Western world, the company was looking to build its capabilities in the vertical in geographies such as Australia and America.
?We are not expecting any downtrend in volumes. Deal sizes are going up, and the tenure is going up. But apart from that there is no material change,? he said.