Infosys’ buyout strategy to be a combination of verticals and geographies
Inorganic growth is being closely examined by Infosys as an important component in moving its business forward. Salil Parekh, the company’s MD and CEO, says there are “a few specific spots” that are the areas of focus. This occurred during an interview with Business Today for the special issue titled “India’s Best CEOs.”
Parekh, who joined Infosys in early 2018, has successfully engineered a turnaround in the company, which was struggling for growth at the time. He elaborated on the buyout strategy, saying, “For example, we need to strengthen our cloud capabilities while also expanding our footprint in certain geographies. Interest exists in both verticals and geographies.” Financially, the company is in good shape, with “a strong balance sheet with $4 billion in cash and no debt.”
Analysts following the company are bullish on the company’s inorganic storey going forward. According to Amit Chandra, AVP – Institutional Research (IT), HDFC Securities, the Infosys growth engine has been largely organic, with acquisitions made for capability and to fill some gaps. “The company has closed large deals that included new engagements, asset takeovers, and managed services/annuity components.”
In a world where digitization is the name of the game, every move made by large IT firms such as Infosys will be scrutinised. And it is their expertise in cutting-edge technologies that will enable them to remain relevant in a disruptive world. Tanksale believes that over the last two years, Infosys has combined its execution prowess with a robust order book.
“The company is well-positioned to capitalise on the massive demand for digital services. Furthermore, it has implemented a number of cost-cutting measures while maintaining its focus on revenue growth momentum “he claims.
According to him, Infosys’ digital platform, Cobalt, as well as its geographical presence and vertical specialisation, “are expected to help in capitalising on the strong demand across verticals.”