Infosys is confident of holding on to its current operating profit margin as it plans to move to a newer business model over the long term with investments in newer technologies such as artificial intelligence and automation, Infosys CEO Vishal Sikka said at the Morgan Stanley TMT conference in San Francisco on Wednesday.

“It is possible to transition out of the current model to a new model in the long term without sacrificing intermediates. We are holding steadfast to our philosophy around profitable growth and not sacrificing our margins. We want to keep margins in 25% range while we grow into these new areas.”

Infosys reported an operating margin of 26.7% at the end of third quarter of FY15, an increase of 60 basis points sequentially. Operating margin is a key indicator for the IT major, though it has witnessed a steady decline in the recent past from its heyday.

Sikka said the company has implemented numerous measures to improve the productivity levels of Infosys ever since he took over as CEO in August last year. “Over the long term, we believe great growth and higher margins are possible given the improvement in productivity we can bring both to the existing business and new business,” he remarked.

Infosys plans to unveil a new strategy in April and it will also detail out its capital allocation for various segments, though there are indications of disproportionate investments in newer technologies.

Infosys’ focus under Sikka has been to improve revenue per employee, which has touched $52,701 in the third quarter of FY15 against $52,365 in the sequential quarter. Sikka said, “The bottom line is can we achieve higher revenue per employee without sacrificing margins. We are higher than others in the industry, as long as this number continues to go up over time, we are doing the right thing.”

Sikka has articulated the strategy of “renew and new” which believes in the duality of purpose of bringing in a newer model in the existing line of business while also moving into a fresh line of activity. “My idea with the renew part is to bring automation, productivity improvement, artificial intelligence to the existing service lines,” he said.

All-round growth

* Infosys reported an operating margin of 26.7% at the end of third quarter of FY15, an increase of 60 basis points sequentially
* Infosys plans to unveil a new strategy in April and it will also detail out its capital allocation for various segments, though there are indications of disproportionate investments in newer technologies
* Infosys’ focus under Sikka has been to improve revenue per employee, which has touched $52,701 in the third quarter of FY15 against $52,365 in the sequential quarter