Infosys earnings: What Vishal Sikka said about acquisition, revenue targets and innovation

Infosys has reported a 5 percent on year increase in consolidated net profit to Rs 3,030 crore for the quarter ended June 30, 2015 and a consolidated revenue of Rs 14,354 crore, up 12.4 percent on year. For whole 2015-16, the country’s second-largest software services firm expects revenue to grow 7.2-9.2 per cent in dollar terms, and 11.5-13.5 percent in rupee terms. Industry body Nasscom expects the Indian IT-BPM sector to grow 14-16 percent in dollar terms for the fiscal. Here’s what the company management said about the results: Efforts pay off “Our efforts in redesigning our clients’ experience and our widespread adoption of innovation, both in grassroots and breakthroughs, are starting to bear fruit in large deal wins and in the growth of large clients,” said CEO Vishal Sikka in a press release. At the post earnings press conference, he said that he would term April-June as a turning or an inflection point. “But we are looking to continue to change the way we do business. We are focused on execution and hope to roll out consulting services for all our clients,” he said. [caption id=“attachment_2353864” align=“alignleft” width=“380”] Reuters[/caption] On acquisitions Sikka said that the company has cash of around $5 billion and it will look to acquire innovative companies. He said the aim is to buy companies that have technologies for the future and not yesterday’s companies. “We are looking at several small companies that are innovative and are using newer technologies. We don’t want to acquire revenue or market share or acquire old technologies,” he said. The company has managed to accrue a revenue of $7 million from the recent acquisition this quarter. On innovation He said the focus is on innovation. Innovation has to be there during good times and bad times as well, he said. He said there has been an effort to bring in a culture of innovation into the existing projects. On targets: Sikka has set a target to reach industry leading growth by middle of next year.  The company sees $1.5 billion revenue from acquisitions by 2020. This is a many-fold increase from the $7 million it had this quarter. “We have laid out targets of $1.5 billion from new acquisitions, $2 billion from new technologies and the remaning $16.5 billion from the traditional business,” Sikka said. According to him, to achieve this target the companny will have to grow 13.5 percent on a compounded basis over the next five years. “We are confident of achieving it,” he said. He also has set a target to achieve $80,000 employee productivity by 2020.