Margin expansion unlikely in FY10: Infy

The IT bellwether Infosys Technologies today said it expects the IT budget of its clients to remain unchanged or marginally lower during 2010.

"Past patterns suggest that when budgets are under pressure, clients do all kinds of things to get more with less, like outsourcing and offshoring," Infosys Chief Operating Officer SD Shibulal told reporters on the sidelines of a conference here.

The country’s second-largest software exporter by revenues, will sustain margins in a narrow range, despite the investment it is planning, he said, adding "we are not looking to expand them (margins) significantly."

Customers are still cautious because the world has not changed, Shibulal said, adding so there is some kind of a cautious optimism in customers and that will be reflected in the growth as well.

Shibulal said his clients have said the global recovery might be protracted, indicating that they would continue to be cautious on spending.

"We will continue with our strategy of taking hedging positions for the short-term. We are not going to take any long-term view at this point in time," Shibulal said.

However, he added that clients have begun taking decisions on IT spending, underscoring optimism that the worst from the global economic crisis was over for the software outsourcing industry.