Faced with investors’ ire for sitting pretty on an over Rs 20,000 crore cash pile, the conservative Infosys may be finally acting on this front.
The country’s second largest software exporter is in negotiations to buy Lodestone Management Consultants, a Zurich-based management and IT consulting firm, in a deal that could be valued over $300 million, reports The Financial Express.
At a time when growth is slowing and rivals such as TCS are inching up, Infosys has decided to buy the Swiss firm which operates in 17 countries and has an employee base of 840 people, the FE report suggests.
Reuters
Firstpost had earlier quoted Sudin Apte, CEO of Offshore Insights saying “Historically, Infosys has been choosy about acquisitions. They are compromising on growth and sitting on liquid assets.”
In 2008, both Infosys and HCL had bid for Axon, a British SAP consultant but HCL bought the company.
The company has been drawing flak from investors over the unutilised cash pile and there were speculations that the company may announce a share buyback to sooth the investors.
The company had reported profits of Rs 2,289 crore which was lower than expected, which made the stock tank pver 8 percent on Thursday.
After the earnings, CFO V Balakrishnan was quoted saying that the company is “seriously looking at acquisitions”.
Media earlier reported the company’s Chairman K V Kamath had urged the management to take some bold decisions and focus on inorganic growth.
This comes at a time when investors and analysts alike are looking at Infosys with skepticism. British banking major Barclays cut Infosys’ rating from ‘Overweight’ to ‘Equal weight’ citing ‘disappointing Apr-June results’ as the reason. The Infosys management noted that it is continuously on the lookout for acquisitions.
