Software giant Infosys is looking to expand footprint in India with focus on Tier-II cities, a top company official said today.

“We are looking for land in various parts of the country and looking to expand our capacity with a focus on Tier-II cities,” Infosys CEO and co-founder S D Shibulal told reporters here on the sidelines of an award function.

“This year we added nearly 45,000 to 47,000 people. For the next year we have already given campus offers to 23,000 candidates,” he said.

“The net additions by us this year are around 25,000,” Shibulal said, referring to attrition.

The company recently sealed a deal with Madhya Pradesh government for setting up a development centre in Indore. It is awaiting response from West Bengal government for setting up a centre in Kolkata. The company is present in 10 cities.

“We are awaiting response from the Kolkata (West Bengal) government. We are positive on the offer made to them,” an Infosys executive said, replying to a media query.

The company, which has been planning a centre in Gujarat as well, said that at present only the issues related to availability of land at fair price are being considered.

“We are focused on tier-II cities more, since some of the Tier-I cities are facing challenges of infrastructure,” he said.

On being asked if he foresees a shift from product-based to service-based operations, Shibulal said, “Infosys has evolved in the last 30 years manifold. If you look at our revenues in 1999, 90 per cent was coming from application development and maintenance, today it is just about 36 per cent.

“We have evolved to next generation consulting and technology organisation. Today we offer a wide range of services, 32 per cent of our revenue comes from consulting and system integration work, 6.5 per cent comes from product and platforms,” Shibulal said.

“In percentage terms our aspiration is more to grow in the products and platform space, both organically and inorganically, and maintain balance in all three portfolios.”

Commenting on the global scenario vis-a-vis IT sector in India, Shibulal said that globally the environment is pretty uncertain, which reflects in company’s guidance. Currently, one needs to be cautious.

Stating his expectations from the coming budget, Shibulal said the need of hour is to grow at 9 per cent, and the expectations from budget are that it will support growth and remove regional imbalances.

“We have to grow at 9 per cent at least, and I think that is the fundamental need for the country. The challenge is how you create nine plus growth.”

Source:http://timesofindia.indiatimes.com/tech/news/software-services/Infosys-eyeing-tier-II-cities-in-India/articleshow/11913499.cms

Infosys, once regarded as the bellwether of India’s software business, is now being perceived by many as anything but. With its pessimistic forecasts for growth and generally negative commentary, India’s second-largest software exporter is gaining a reputation among rivals and some analysts as an outlier whose dark mood is in contrast to the more sunny sentiment elsewhere in the industry.

The reason, close observers of Infosys say, is because the company is in a spot of bother, facing challenges from within and without, the likes of which it has not encountered before.

The more immediate problem for the company is that its main clients are worse off than their competitors. This means that financial firms like Bank of America and UBS-the biggest customers of Infosys-are spending less than the rest on technology. On the other hand, financial firms like Citigroup and JP Morgan that work with Infosys’ rivals, are not crimping on technology spending. This partly explains why Infosys has been sounding woebegone.

“We do not see weakness at Infosys as a broader industry challenge-portfolio issues at Infosys are at play,” Kawaljeet Saluja of Kotak Institutional Equities wrote in his report last week.

In seven out of the past 12 quarters, Infosys’ sequential sales and operating profit growth have lagged that of Tata Consultancy Services and HCL Technologies, which also means that its rivals are more aggressive in capitalising on opportunities. Besides, though Infosys has reported sustained traction in client addition, in line with the others, it is not yet reflected in its growth. This could be because of Infosys’ past strategy of selecting profitability over volumes.

But CFO V Balakrishnan does not believe that there is anything particularly wrong with Infosys. The lowering of guidance two quarters in a row, he said, is a fair reflection of clients’ behaviour. “I don’t think it is a company specific issue as most of the offshore players tend to work with similar set of customers. Whether our guidance is conservative or pessimistic, only time will tell.”

During the technology boom in the early years of the last decade, Infosys was a byword for the attractiveness of software services. Many brick-and-mortar companies only had to announce the creation of a software subsidiary and their valuations would skyrocket on the news.

A big part of the reason for Infosys’ success has been its seven-member founding team led by N R Narayana Murthy. In the span of a few months, Infosys has seen the departures of Nandan Nilkani, Murthy and K Dinesh, with S D Shibulal now occupying the post of chief executive. He will be the last of the co-founder to Infosys CEO.

“After Shibu became CEO, there’s nobody really there to keep everything together at that level. I believe Infosys is missing somebody to drive Shibu’s earlier role-that of an execution champion,” said the head of large Indian tech firm, requesting anonymity.

This year, Infosys has revised its revenue forecast from over 20% growth projected during April 2011 to 16.4% this month. For the fourth quarter ending March 2012, it expects to earn incremental revenues of almost $5 million, which means no growth as it’s coming from the acquisition of an Australian back-office unit. This is the slowest growth for Infosys in any fourth quarter over the past five years.

“Infosys’ inconsistency through FY 12 and the big guide down on March 2012 growth coming on the back of multiple mishaps on the HR front through FY11-12 has us wondering whether the slow creep of mortality is consuming Infosys,” Nimish Joshi and Arati Mishra of CLSA wrote last week.

The biggest battle is for fresh business and that is where it is finding it difficult to maintain the gap with Cognizant, which has already overtaken Wipro as the number three IT services provider. Whereas Infosys has guided growth of 16.4%, Cognizant Technologies’ is twice that. For instance, the last time Infosys had fresh business in excess of $100 million was in September 2010 quarter.

Source:http://economictimes.indiatimes.com/tech/ites/infosys-losing-bellwether-tag-even-as-peers-like-hcl-tcs-shine/articleshow/11505559.cms