India?s second largest software exporter, Infosys Technologies, has surpassed its revenue guidance for the third quarter of the current fiscal and raised earnings projections for the year. Confidence among clients has improved over the year and the pricing environment has stabilised, Infosys chief executive and managing director S Gopalakrishnan told FE?s Reema Jose. Excerpts:

The general sentiment is that Infosys has been cautious in revenue guidance for the year, despite raising hiring targets. What is the reason for your caution?

The reason for caution is that clients have not been finalised budgets yet. And without clear indication of those numbers, it is difficult to actually give a very optimistic guidance. Typically, the guidance is based on the data that we have and without the data we have to be cautious on the guidance. But we have seen growth, and we have seen momentum, hence we have increased hiring. Overall, we are optimistic about the current scenario.

The company has reported a decline in revenues on an annual basis. How has this quarter been different compared to previous quarters?

If you look at the last two quarters, from a year-on-year perspective revenues have declined. In fact, the guidance for the year was -3% to -7%. What we are seeing now is actually an improvement on that. We will end the year?if everything goes alright?with an annual growth of 1% to 2%. So actually, we have improved on the situation from the beginning of the year. This quarter looks very good.

You had mentioned earlier that clients were seeking discounts making the pricing environment challenging. With the confidence levels returning, is there is a change in that situation?

Pricing has been stable. In fact, we have improved the revenue per employee by 1.1% on reported currency terms this quarter. We are not seeing any unusual renegotiations or demand for discount and things like that. There are always some renegotiations as part of normal business, that is all that we are seeing right now.

About your focus on the India market?you have planned a separate revenue model for the India arm. What is your long-term vision for India business, in terms of the country?s geographic contribution to Infosys? revenue?

The India business is starting with a small base right now. India business revenue is about 1.2% of overall revenue. Moving ahead, we expect India to contribute about 5% of revenues. We have not given a time frame for that.

But definitely, we are very positive about India?s opportunities. We are winning deals including government contracts in India.

What gaps are left to be filled for Infosys as you deal with large multi nationals like IBM and Accenture who will want to benefit from increased offshoring when the market recovers?

We have been expanding our footprint?we have gone all the way from consulting to implementation support, maintenance, etc. Secondly, we have been building on our client relationships and are looking at how to connect with the business side of our clients rather than just IT. Thirdly, we have to manage larger and larger relationships and that requires more sophisticated programme management capabilities, ability to implement change for clients, and more complex assignments. We are building on all these aspects. Some of these come through lateral hiring. Some of these come through our own investment into education, training etc within the company.

Will your onsite offshore mix change considerably as you increase hiring locally while expanding your global foot print?

The onsite offshore mix is a function of the effort which is delivered onsite. Currently, that effort is delivered by people going from India. But more and more that effort will be delivered by local people, who will be recruited locally in these markets. Right now, that is about 5%, and we plan to take it to about 15%. But when that happens, the onsite offshore mix will be a function of the business mix rather than where these people are hired.