IT Outsourcing India

An improvement in the overall business climate has prompted Indian outsourcer Infosys to raise its revenue and earnings forecasts despite posting a slight drop in quarterly profit today.

Revenue at the IT services firm reached US$1.15bn (AU$1.27bn), a 5.1 percent decline on the same quarter a year ago but a 2.9 percent increase on the previous quarter.

Infosys expects revenue to reach approximately $4.6bn (AU$5.09bn) for the full fiscal year, which signifies a one per ent drop on last year’s numbers.

While the results have surpassed Infosys’ own expectations, the company’s predictions for the future are rather conservative.

Reasons for this approach include the absence of significant market growth, high unemployment and currency volatility, said Infosys head of Europe BG Srinivas.

“The worse is likely to be over, but I will still view the future conservatively while being cautiously optimistic,” he said.

Infosys was reported to be chasing some 12 to 15 outsourcing deals worldwide. But Srinvas said the sales processes are taking longer than usual as clients focus on supplier consolidation and strategy reviews.

Infosys is still hiring 2,000 staff globally with a view to expanding its sales capability. The firm reported that it is hiring senior technology architects and business consultants.

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In a bid to expand the customer base, Mahindra Satyam, earlier known as Satyam Computer Services Ltd., on Tuesday said it is planning to tie up with Saab, a military defence and civil security solutions provider, to develop its India operations. Saab’s outsourcing contract to Satyam is estimated to be between $300-$400 million and is one of the largest customer wins in the recent past.

“This collaboration is a strategic step towards synergizing Satyam’s unique strengths in mission critical systems, ERP, engineering services, avionics and integration and Mahindra’s Systech’s manufacturing capabilities and engineering excellence,” said Anand Mahindra, Vice CMD, Mahindra Group.

The contract would also cover areas such as homeland security where focus is planned for end-to-end security solutions. “We view this relationshipa with Mahindra Satyam as a strategic meeting of two highly skilled teams believing in techincal and engineering excellence,” said Ake Svensson, President & CEO, Saab.

According to the initiative, Satyam and Saab will jointly address the Battlefield Management System (BMS) — which is field proven and deployed across many countries — for the Indian Army.

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