How do you see the overall environment for Infosys, especially when Europe is still recovering
Overall, the pricing environment is stable and we are not seeing any major price negotiations happening. Attrition levels have come up to 15%. However, we are comfortable with it as the entire industry is going through it. We are already seeing this level coming down and expect the second quarter to be better. But we are not looking at another wage hike as we have already given hikes at an average of about 20-22%, which is among the highest in the industry. In Europe, we expect to grow.
Volume grew 7% this quarter and we are already investing in human resources if any sudden demand comes in.
Why do you think that Europe will grow when the current economic environment is still unstable
Europe has not been off-shoring like the US and if there are budget cuts going ahead, it would mean bringing more efficiency leading to increased offshoring. However, at this point, we are not much concerned as there are no budget cuts or negotiations in contracts. We expect Europe to grow as investments pick up. We see Europe lagging behind the US for the next couple of quarters, which can be attributed to the decline in the manufacturing and telecom verticals that have Europe exposure. We expect it to contribute to about one-third of our revenues in the long term.
How about growth in the US
The growth in the BFSI has mainly come from the US markets for our solution-led works like risk and compliance and mergers & acquisitions. However, we are cautious. At any point in time we are running 8,000 projects and some sort of negotiations are always happening. But we are not expecting any material impact on the margins with these.
Do you think currency could play a spoil sport even if demand picks up
At Infosys, we will be taking short-term hedges and this will be for about two quarters. We have $700- 800 million hedging covered this year.