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Rachael Stormonth

Rachael is Executive Vice President, Research, at NelsonHall. She has global responsibility for research programs including the flagship Vendor Intelligence Program, which delivers the most comprehensive vendor intelligence in the form of Key Vendor Assessments, Quarterly Updates, and Daily Vendor Tracker. She also consults widely with NelsonHall clients.

Infosys - Quarterly Update

Quarterly Update

by Rachael Stormonth

published on Jan 16, 2017

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Report Overview:

NelsonHall’s Quarterly Update on Infosys provides a snapshot of developments at Infosys in the last quarter.

Who is this Report for:

NelsonHall’s Quarterly Update on Infosys provides a snapshot of developments at Infosys in the last quarter. It accompanies NelsonHall’s more comprehensive Key Vendor Assessment program. Both programs are designed for:

  • Marketing, sales and business managers developing strategies to target service opportunities within the BPO/IT Services markets
  • Sourcing managers monitoring the capabilities of existing suppliers of IT outsourcing services and identifying vendor suitability for IT services
  • Consultants advising clients on vendor selection
  • Vendor marketing, sales and business managers looking to benchmark themselves against their peers
  • Financial analysts and investors specializing in the BPO/IT services sector.

Scope of this Report:

The report provides a quarterly update on Infosys.

It accompanies NelsonHall’s Key Vendor Assessment program which looks at Infosys’ IT and BPO offerings, capabilities, and market and financial strengths, including:

  • Identification of the company’s strategy, emphases and new developments
  • Revenue breakdowns
  • Analysis of the company’s offerings and key service components
  • Analysis of the profile of the company’s client base including the company’s targeting strategy and examples of current contracts
  • Analysis of the company’s strengths, weaknesses and outlook.

Key Findings & Highlights:

Q3 Performance “broadly in line with expectations”

Q3 FY17 revenues were up 6.0% y/y as reported in US$, up 7.3% in CC. RBS ramp-down had a 1.1% impact on revenues.

Application development, infrastructure, engineering services and PPS all had strong quarters. Infosys Consulting is in recovery mode

Operating margin was up 20 bps y/y.

CY 2016 revenues crossed $10bn.

Guidance for full FY17 is:

  • Revenue growth of 8.4-8.8% in CC
  • Operating margin of 24-25%

RBS ramp down now mostly completed

Automation beginning to impact revenue per capita; hiring

The amount of effort saved through automation continues to increase and rev per capita has increased y/y for the first time in a while

Recruitment has slowed significantly: headcount in Q1-Q3 FY17 increased by 5.7k y/y, down from a 17.2k increase in the prior year period

Infosys Innovation Fund looks at India

Investments in Q3 FY17 included an India-based early stage venture fund, and an Indian specialist in drone technology.

New India-based Deputy COO

New U.S. administration, likely greater protectionism

In anticipation of increased restrictions around H-1B visas, Infosys is looking to increase local hiring, both lateral and campus hires, also introduce more collaborative technology into its global delivery model.

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