Infy shrugs of recession risk, upbeat on IT spend
Sees continued strength in the US, European markets
- Digital focus of clients quite strong
- Cost efficiency and automation acting as twin engines
- Consumer spend data in US, Europe promising
Bengaluru: India's second-largest IT services company Infosys is comfortable with the higher revenue growth guidance of 14-16 per cent it gave for the full fiscal, as global IT spends are in good shape, CEO Salil Parekh said on Tuesday. Infosys' top boss told PTI in an interview that the company sees continued strength in both US and European markets, although it is keeping a close watch on the macroeconomic environment as these are things one has to monitor on a constant basis.
The optimistic commentary from the Infosys management comes even amid talks that the global economy may be facing an increased risk of recession. Many analysts have flagged concerns over higher-than-expected inflation, and some large global tech companies are pulling back on aggressive hiring plans due to concerns about a looming economic slowdown.
Parekh asserted that global IT spending is in a good shape and the digital focus of clients is quite strong. That, along with cost efficiency and automation are acting as twin engines, he said. If indeed the global economy faces more difficulty going forward, automation and cost efficiency will become even more critical for companies, he reasons.
"We had 21 per cent growth in Q1 and we have raised our guidance to 14 to 16 per cent (for full year). We feel comfortable that we see this level of growth in this year that's the sort of traction, we are seeing," he said.
Seated in his office at the sprawling Infosys campus in the electronics city, Parekh said while there has been a lot of talk and inflation is high, on the ground the July consumer spend data for the US and Europe has shown year-on-year improvement.
"These are different signals in the environment...consumer spend is a good number, and that is one example that gives you some indication of what is going on," he said.
Parekh, dressed in a blue suit and a crisp white shirt paired with a striped tie, assured that the company is being watchful about the environment. Parekh, 58, often described as mild-mannered and approachable by those who know him, has been credited with the storied turnaround of the Indian IT giant, after the Bengaluru-headquartered company hit a rough patch a few years ago. Parekh took over at the helm in January 2018, after a public spat between the company board and founders on issues of governance, precipitated the exit of then CEO Vishal Sikka. Over the last few years, Parekh has navigated challenges and steered the company back to stability.
Comfortable with recently-raised full-year revenue growth outlook of 14-16%
- Salil Parekh, CEO, Infosys