Infosys is well poised to garner new deals: Experts
Even though the Infosys stock prices had dipped to around 6 per cent in the morning hours on the opening day of the market post the announcement of results, the stocks recovered during the course of the day. During the recent announcement of results for Q4 of FY18, the company had stated that it expects the revenue for the new financial year FY19 to grow in the range of 6-8 per cent in constant currency (CC) terms and 7-9 per cent in US dollar terms. Some experts feel that such kind of conservative prediction will not have any major impact on the company which is now well poised to garner new deals.
“The outlook for revenue growth of 6-8 per cent in constant currency terms is fairly decent and we are positive about the Infosys stock. There is a probability of more deals for the near future and the company's deal pipeline is improving. The company's top-10 accounts grew in line with the company's average following three quarters of sub-par growth. Also the decision to sell the past acquisitions (Skava and Panaya) by its former CEO Vishal Sikka, the company will put an end to any negativity surrounding the deals such as the whistle blowers' allegations. Though such things may bother the company in the short term, I do not see any major impact for the company in the long term,” said Amit Chandra, IT Analyst at the Mumbai-based HDFC Securities.
Experts such as Alok Shende, of Mumbai-based Ascentius Consulting feel that the conservative outlook for revenue growth for the company in the range of 6-8 per cent is in line with what the company can achieve, and is much more realistic than say the unachievable growth outlook which its former CEO Sikka had given. “Sikka had given a very unrealistic figure of the company achieving a revenue of $20 billion, which finally the company could not be achieve and thus created a very negative impression among the share holders also. By giving realistic, achievable growth figures the company is trying to instill confidence among its share holders and also by giving much more room to its new CEO. Additionally, in deciding to do away with the two acquisitions – Skava and Panaya – the company has shown that it wants to completely do away with the legacy of its former CEO Sikka,” said Shende.
Another expert Kris Lakshmikanth, CEO and founder of the recruitment firm Head Hunters India Limited, feels that the high dividend which Infosys is giving to its share holders will continue to attract new share holders in times to come. “Sikka had acquired Skava and Panaya to create a platform for the company as he was more of a product person. The current CEO is more of a services person and does not have any interest in continuing with these technical platforms. We can still hear about the whistle blowers allegations, say for the next two or three quarters, and until the Rajiv Bansal compensation issue is settled but it will slowly fade away thereafter,” said Lakshmikanth.