Infosys confident about more offshoring opportunities

The COVID-19 pandemic has pushed demand and clients understand that every work does not have to be done onsite, which is expected to open a lot more offshoring opportunities from large global markets going forward, according to a top Infosys' executive.

The Bengaluru-based company, which logged a 23 per cent jump in its December 2021 quarter revenue, also said its portfolio of services and capabilities, especially on cloud and digital, are resonating well with clients and it sees a good pipeline for that.

"In the long run, if you see, COVID-19, while it had a huge impact on demand, the entire ability for the supply side to deliver in a remote environment really will shine up, and that has opened up the eyes of many of our clients that every work does not have to be done onsite.

"It can be done in a near-shore location, it can be done offshore," Infosys chief financial officer Nilanjan Roy said during an analyst call.

He added that this will help the industry in much larger offshoring at an overall level, and part of that benefit will be shifting more work to offshore locations.

"I think there can be short-term impacts like we saw this quarter, 10-20 basis points here and there, but the secular trend – we think we will continue to see that the large global markets will open a lot more offshoring opportunities," he said.

Infosys CEO and managing director Salil Parekh said the mix has changed over the past 18 months with a lot of the remote working that was put in place and work from home allowing the work to be delivered from a different location with tremendous yields and efficiency.

"What we saw in the last quarter was, some things have opened up in terms of travel and we are also being extremely optimal in what we have done in the previous quarters and this is something that has given us more ability to drive connects with clients and growth.

"We see in the medium term tremendous opportunity for an efficient mix because clients have also seen that once the work is done remotely or work from home that more opportunity exists, there are works to be done from a location further away," he said.

Parekh added that as a medium-term trend, the company sees that as a positive trend and there will be ups and downs each quarter but as a longer-term trend, it sees that as a positive trend.

On the back of strong demand from businesses going digital, the country's second-largest IT services firm has raised its revenue growth outlook to 19.5-20 per cent on a constant currency basis in the financial year ending March 31, 2022, up from 16.5-17.5 per cent forecast of October.

Parekh said the demand environment remains strong and Infosys' portfolio of services and capabilities, especially on cloud and digital, is resonating well with clients, so it sees a good pipeline for that.

"We continue to see a good large deal pipeline.

"We have seen a steady expansion of our clients over $50, $100, $200 million and so on.

"We have seen that expansion within clients is working well and also our new client wins and new accounts are working well.

"So, overall, we have the various elements of continuing this demand environment strongly," he added.

Photograph: Vivek Prakash/Reuters