Infosys innovation strategy well received by clients, says Shibulal

Infosys Chief Executive Officer and Managing Director said on Friday that despite difficult conditions prevailing in the market, the company’s new focus on innovation-oriented growth has been well received by clients. 

“Our new strategic direction is being received very well by our clients, industry bodies and analysts alike. We have witnessed early successes and the road ahead is both encouraging and promising,” Shibulal said in a letter to shareholders. 

He noted that the company had embarked on a new direction when providing its clients with a framework of innovation to leverage emerging opportunities and prepare for the challenges of the future. “This new strategic direction has set us on a journey to redefine the industry for long-term, sustainable and high quality growth,” he said.

Noting that the Bangalore-based IT services giant’s over journey spanning over three decades “has not been easy”, Shibulal said that its resilience had been put to the test time and again. “We had to overcome challenges that could have changed the fate of our organisation. Be it gamechanging trends in technology, industry and business models, or regulatory challenges, we had to steer ourselves clear of turbulent waters many a time. This required us to transform ourselves as an organisation — to adapt to changing business environments and also the changing business priorities of our clients,” he said.
 In apparent reference to the company’s operating margins coming under pressure in the last three quarters with increasing client pressure on pricing and falling demand in key markets, Shibulal said, “If we tell you that this anxiety in the marketplace does not bother us, we would not be speaking the truth. Yes, it does cause the rare moment of self-doubt.”

He said that during times of change, organisational growth has been seen to slow down. “Sometimes, these slowdowns were also caused by reasons beyond our control,” he said, adding that every slowdown has only strengthened the company’s convictions in its strategic choices. “Almost 98 per cent of our revenues comes from repeat business. This is testament to the trust that our clients place in us and in our ability to adapt to their changing business needs,” Shibulal said.

Infosys and its subsidiaries added 235 new clients in fiscal 2013, taking the total client base to 798. The number of million dollar clients rose to 448 during the fiscal from 399 the previous fiscal, with consulting, package implementation and other services contributing 31.4 per cent of total revenues.

“We continue to see momentum in the Products, Platforms and Services space which contributed 5.7 per cent of our revenues in the last fiscal,” Shibulal said. The mainstay IT services business brought in 62.9 per cent of the company’s revenues. “Services like infrastructure testing, developed by integrating our expertise across infrastructure management and testing services, are clearly driving incremental growth for this business,” Shibulal said.

Noting that clients are increasingly looking at mobility to drive growth, Shibulal said that Infosys researchers had filed 97 unique patents in the last fiscal.The company added 37,036 employees, a net addition of 6,694) with total employee strength for the year ended March 31 reaching 1,56,688 people.