The environment for the industry as a whole is cautious and positive, Kris Gopalakrishnan said. Indias export-driven services sector has been winning large outsourcing deals from global firms, but a 12% rise in the rupee against the dollar in 2007, soaring wages and growth worries in the US, the top market, battered IT shares last year.
Gopalakrishnan said there were signs that technology budgets of Infosyss clients were likely to be flat or slightly higher this year. We are looking at stable prices with slight upward movement, he said during the annual meeting of the World Economic Forum in the Swiss resort of Davos.
Clients are willing to accept a 2-2.5% increase annually because that is where inflation is, he said.
Earlier this month, Nasdaq-listed Infosys, a showpiece of Indias software revolution, beat market forecasts with a 25% rise in quarterly profit and raised its annual growth outlook. Infosys and local rivals have been persistently linked with European players including Capgemini on takeover talks but these firms have denied they were in talks.
I would say the probability is lower to make big ticket acquisitions, Gopalakrishnan said in response to a question on whether Infosys was very unlikely to make large acquisitions.Look at the challenges of integration. We would be a very different company and the model will be very different. So, the risks are very high.
The probability of smaller acquisitions are higher than the probability of larger acquisitions, Gopalakrishnan said.