13-15% growth guidance strongest for Infosys: MD & CEO Salil Parekh

After four days of unceasing fall, the Infosys stock finally started to move into positive territory on Thursday. The market was disappointed with a weak set of numbers for the fourth quarter (Q4) of 2021-22 (FY22).
 
Infosys Chief Executive Officer and Managing Director Salil Parekh said the guidance of 13-15 per cent is the strongest-ever for the company at the start of a financial year (2022-23), steering clear of any mention of being one of the top wealth destroyers, eroding around Rs 1.05 trillion of wealth in the last five sessions.
 
“I cannot comment on market movement. People will have dissimilar perceptions. From our perspective, we see very strong growth. We see good client traction and we want to continue that. Add to this, the guidance of 13-15 per cent growth, which I think for the start of the year is extremely strong,” said Parekh in an interview to Business Standard.

 

Parekh said that with strong growth back on the table, Infosys has now launched a new strategy. “The focus of the new strategy is to give more attention to Cloud — we want to build in more capabilities. We want to take Cobalt (a set of services, solutions, and platforms for enterprises to accelerate their Cloud journey) to the next level,” added Parekh.
 
He also added that there are several new technologies that Infosys has identified which the company will start to build upon. “The choices we make may not throw up immediate results, but will help us in the years to come. These will be similar to what we did with Cloud and digital a few years back and the results are now clearly visible,” said Parekh.

 
Digital as a revenue for the company grew 41.2 per cent for the financial year, taking its total contribution to the company’s revenue to 57 per cent.
 
According to analysts, Cloud is growing a much faster clip, with Cobalt seeing significant traction among clients.
 
The other concern among analysts was the total contract value (TCV), although for the full year the company reported TCV of $9.5 billion. Infosys only considers large deals of $50 million and above under TCV.
 
For Q4, TCV came in at $2.3 billion — lower than the third quarter of FY22. However, Parekh stated that the deal pipeline was the strongest-ever for the company.

 
“The pipeline is the strongest we have had in a very long time. A few years ago, TCV was in the range of $1-1.5 billion. In the past four quarters, we have seen a consistently higher range. Just that mega deals are becoming less predictable,” said Parekh.
 
With growth back on track, the only challenge seems to be around supply. Attrition at 27.7 per cent for Q4FY22 has been the highest for the industry bellwether. The only positive aspect was that on a quarter-on-quarter basis, the company has seen a drop of five points in attrition.
 
 “We are putting in place a few initiatives that further connect with employees. Some of these initiatives have been launched on an internal basis. We want to make sure our employees have the best when it comes to reskilling, and giving them a good career progression path. I want to make sure that by the end of this financial year, we are well settled when it comes to attrition,” he said.

 
When asked about the news that Infosys has activated a non-compete clause for employees leaving the company, Parekh added: “Our only concern is client confidentiality be maintained and is not intended to constrain choices our employees make.”