Quarterly Update
published on Apr 16, 2019
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:
Completes year one of three-year transformation plan; is on track
- There are clear signs of improvement, in terms of topline growth, accelerating increase in digital revenues (>40% CC y/y growth in Q4) and doubling in the TCV of large deal signings
- However, certain challenges remain.
Localization initiatives expanding from U.S. to other regions
Three JV agreements now signed
- Two in Asia, one in Europe
- These reflect an increased appetite for different commercial models.
Year 2 of the three-year plan, “Building Momentum” but initial guidance is conservative
- The lower end of the initial revenue growth guidance band for FY20 implies no acceleration in CC growth from FY19, in spite of the increase in large deal signings. Is seeing some macro concerns in certain pockets
- Initial target margin guidance for FY20 implies further margin contraction even though there is an increased focus on pulling operational levers and the proportion of higher margin digital work is increasing. Infosys is attributing some of this to ramp ups in some of the large deals, which include the JV agreements.