Infosys 'seriously looking' for acquisitions: CFO

The company had cash and cash equivalents worth Rs 20,596 crore on its books at the end of June 30, 2012

Infosys today said it is "seriously looking" at acquisitions as the company understands the importance of growth through buying out other companies.

"We are seriously looking at acquisitions, if we find any good strategic fit, we want to use a cash to grow that part of the business to meet our overall corporate objective," Infosys Chief Financial Officer V Balakrishnan said.

"We are focusing on Infosys 3.0, there is a greater focus on product platform solution kind of business.," he said.

The top management, driven by Chairman and veteran banker K V Kamath, has been actively scouting for acquisitions to beef up its portfolio.
The company, last year while announcing its Infosys 3.0 strategy, had said it would focus more on consulting and products and platforms.

Infosys, which announced its financial results today, had cash and cash equivalents worth Rs 20,596 crore on its books at the end of June 30, 2012.

The software giant reported a 32.92% jump in consolidated net profit to Rs 2,289 crore for the first quarter ended June 30, 2012.
Infosys has been under-performing compared to its peers like TCS, HCL Technologies and Cognizant in the past few quarters.

For FY'13, the company has slashed its forecast of an 8-10% dollar revenue growth to five% now, much below the industry body Nasscom's estimate of 11-14% growth in the sector.

An acquisition may help Infosys turnaround its fortunes at a time when IT companies globally face challenges of slow demand amid economic turmoil.

There were also reports of the company using the cash on the books for a buyback offer.

"Buyback is a last in the line, probably even if we want to return it, it may be a dividend like what we have done in the past few years. But the primary use of cash could be for some strategic acquisition to meet our corporate objective," Balakrishnan said.

The company is also aggressively scouting for an acquisition opportunity to grow its BPO business.

"The inorganic growth is key part of our strategy. If you wind back we have done three acquisitions in the last six years. So, there is a dedicated team in BPO which continues to look at and scan opportunities. As we speak we continue to look at opportunities," Chief Executive at Infosys BPO, D Swaminathan, said.

The BPO segment of the company has registered strong growth in the June quarter. Infosys BPO posted revenues of Rs 109.34 crore in the quarter ended June 2012, against 83.34 crore in the year-ago period.

"Wherever we believe that there is proposition which is going to enable us to bridge a gap in the service offerings and get us into a newer market much faster, those are the kind of deals that we are bullish about," he added.