Infosys sure of clinching Axon deal: Gopalakrishnan

Written by Corporate Bureau | Chennai, Aug 27 | Updated: Aug 28 2008, 06:09am hrs
Infosys Technologies Ltd is sure of clinching the Axon deal, despite rumors that a rival UK security firm has quoted a price higher by 7 pence per share to counter the formers 407 million pound (Rs 3,300 croreor $753 million) offer. S Gopalakrishnan, MD and CEO, Infosys said that the Indian IT giant can sail through the deal with its transaction advantage of a full cash deal offer.

Responding to concerns surrounding the mismatch in operating profit margins between the companies (Infosys has a operating profit margin of 21.4% against Axons 15%), he said the lower margin offsetting process will be worked out after the completion of the deal by November-end. He said Infosys will leverage 65% of the SAP business of the European company, adding that Infosys wishes to reset the ratio of market presence in the US, Europe and Asia from the current 60%, 30% and 10% to 40%, 40% and 20% respectively.

Speaking about growth prospects in domestic and overseas markets, S D Shibulal, director, Infosys said that the company is expected to sustain the current rate of 19% to 21% year-on-year growth. Detailing the expansion of portfolios, with the paring down of application development services from 80% to 46% since the last financial year, Shibulal said Infosys intends expand to new portfolios like financial services, ERP and consultancy, mining and RIM (remote infrastructure management) services in new markets like Australia, Canada and Latin America.

Meanwhile, unveiling its plan to build a 35,000 seater facility in Mahindra City SEZ near Chennai, T V Mohandas Pai, director-human resources, Infosys said the incremental growth and expansion of the company will be in SEZ blocks rather than in STPs (software technology parks). He cited Infosys upcoming facilities in SEZs at Pune, Hyderabad, Chandigarh, Bhubaneshwar and Jaipur to drive home the point.

Speaking about investments in Mahindra City SEZ, he said Rs 450 crore out of a planned expenditure of Rs 1,250 crore has already been allocated, with the first phase of a 11,000 seater facility nearing completion. He added that Infosys plans to build six buildings which will be equipped with thousand room hostels for employees, gyms, bowling alleys, malls, table tennis courts, mobile shops and book shops.