Infosys Technologies is looking to acquire small product companies with strong intellectual property in a bid to move increasingly towards a non-linear business model.
Chief financial officer V Balakrishnan said Infosys was exploring companies with products for the healthcare and government verticals, niche areas where the IT major does not have large processes. Small companies in the consulting space, considered a high growth area, would also be a key focus.
Companies with platforms akin to the US-based McCamish, which was acquired by Infosys late last year for $38 million, would be potential targets. While he did not specify regions where companies were being scouted, Balakrishnan said they were spread across all markets. ?We are looking for companies. We have a list of companies which we pursue. But it has to be the right company, at the right price, and it should make strategic sense for us,? the CFO said. ?We will look where a lot of service opportunities are available and where we can create a non-linear service model,? he added.?
In the first quarter of the current fiscal, Kris Gopalakrishnan, Infosys chief executive officer had said that the company would be spending close to 10% of its revenues on acquisitions.
Talking about the expansion of the company?s offshore centers in other countries, which have become worthy alternatives to ?increasingly expensive Indian operations, Balakrishnan said that the company would go where ever it found the opportunity to grow. However, its focus would be more on building non linear growth model and on deepening its reach within emerging markets.
?Today, Africa is emerging as an interesting market. Middle East, Australia, and in India itself, we are seeing good traction. So more focus will be on how to expand into these areas,? Balakrishnan said.
Balakrishnan said that operating margins, at 30.2%, had remained flat as a result of the impact from rupee appreciation being offset by an increase in pricing. The rupee had appreciated by about 3.5%, which could have impacted margins by 1.5%, but was offset by a pricing increase of ?1.6%. Rupee fluctuation continued to trouble the export driven company, which was taking a short term view and covering exposures for up to two quarters at any given point.