Infosys increases European exposure

It's one way to manage the rupee rise, says mentor Naraana Murthy.

Infosys is increasing its exposure to Europe and other regions, besides cutting costs to manage the impact of the rupee appreciation against the dollar, the software giant's chief mentor N R Narayana Murthy has said.

"We have been enhancing contribution from Europe and other areas of the world. Now Europe forms 27 per cent of our total revenue when it was 18 per cent five years ago," Murthy said in an interview to India Business Report on BBC World.

The US, however, remains the most significant market for the country's second-biggest software exporter. "The US is still the most dynamic market, US is the market which believes in innovation in technology, US is the market which is easiest to sell, so we do not regret our dependence on that business."

Murthy also said that the appreciation of the rupee against the dollar was hurting software companies, including Infosys.

"For every drop of one rupee in the exchange rate we lose as much as fifty paise or half of that in our margins," he said.

The rupee has risen more than 12 per cent against the greenback since the beginning of this year and is trading at its highest levels since April 1998.

"We have learnt to control our costs, to improve our per capita productivity, (and) to use technology even better," he said, while admitting that the company lost its rupee guidance for the first time during the June quarter.

Murthy dismissed fears of any backlash against Indian firms in the US with the presidential elections approaching.

"We were lectured for a long time by our American friends about our opening up and we did... We have listened to the advice to our American friends and we have so many American MNCs working here... So now to hear that they don't agree with that philosophy is somewhat strange," Murthy said.