Infosys eyeing acquisitions in Europe

Infosys Technologies Ltd is stepping up sales to new customers and will consider acquisitions in continental Europe as it seeks to reaccelerate growth in the midst of an ongoing economic slump, Chief Executive Kris Gopalakrishnan said on Wednesday.

In April, Infosys warned growth would slow to between 19 percent and 21 percent in 2008, or US$4.97 billion to $5.05 billion, half the growth rate it enjoyed in 2007 over 2006. Gopalakrishnan told reporters in an interview during a trip to Silicon Valley this week that he expected growth of 20 percent to 21 percent — the higher end of this range.

Infosys, India’s second largest software services company — an icon of the global outsourcing trend — develops software, designs global supply chains and offers back-office services for more than 500 corporate customers. US clients account for 60 percent of revenue while Europe is 30 percent.

Gopalakrishnan, one of seven co-founders of the 27-year-old company, said he expects sales growth to pick up quickly once economic uncertainty abates later in 2008 or early 2009, paralleling Infosys’ reacceleration after a downturn in 2002. “We feel that once the dust settles … they (clients) will be increasing their spending,” Gopalakrishnan said. 2002 revenue growth slowed to 32 percent from above 100 percent in 2001 but sprang back over 40 percent from 2003 onward.

“We see that possibility again,” he said. But he declined to predict when a recovery might occur. For more than a year, Infosys shares have been battered by a strong rupee, rising wages and pessimism about the global economy. “There was delay, and there still is delay,” Gopalakrishnan said. “I think there is still uncertainty about when we will see the bottom.

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