2014 could see return of double-digit IT services growth

Article via Computer Weekly

Indian IT services supplier Infosys believes 2014 could see the return of double digit sales growth following a 5.8% increase over the last 12 months.

A total of $1.9bn sales in the final three months of its financial year took total sales for the 12-month period to $7.4bn.

But despite the revenue growth, Infosys’ profits dropped 4.1% to $444m in the final three months of its 2013 financial year that ended in March, as a result of staff costs and price reductions.

Infosys’ European head BG Srinivas, told Computer Weekly lower-than-expected sales meant it had too many staff on the books. Infosys could not fully use the staff it had retained as a result of customers delaying projects. Srinivas also said the services provider had reduced prices, which also affected profit.

Economic uncertainties meant the company has predicted a broad growth range of between 6% and 10%, but internally it is confident of double digits.

India-based IT services firms were for a long time associated with double digit growth, but such was the extent of the economic downturn that growth dropped significantly.

“As we enter 2014 we see a robust pipeline. But due to slowness in decision making and macro-economic uncertainty, we are predicting a broad range for growth,’ said Srinivas.

Srinivas said the growth over the next year will come in consulting and system integration, IT outsourcing and business process outsourcing (BPO), with Infosys making investments in cloud, mobility and business analytics.