After posting upbeat earnings in the past two quarters, India's second-largest IT firm, Infosys, expects to record industry-leading growth rates in the coming quarters.
Infosys' net profit rose 9.8% to Rs 3,400 crore in the July-September quarter on a sequential basis, while revenue stood at Rs 15,635 crore. It posted a profit growth of 5% in the first quarter of the current fiscal year, showing signs of revival under its chief executive Vishal Sikka.
"We expect to come back to the industry-leading growth path, as we have said. When (N R Narayana) Murthy came back to Infosys (in June 2013), we had put a three-year time frame and we are on track to get there," said Sikka at the Barclays Global TMT conference in San Francisco on Wednesday.
The Bengaluru-based IT major said the current growth was led mainly by improvement in operation efficiency, and that the company would see a "more pronounced" growth once new measures initiated by it start yielding results.
The average contract value of Infosys' large deals has increased to $800 million compared to $450-550 million two years ago, it said.
"The near-term results were driven largely by operational improvement. But as we go forward, this will be driven by the new things we do," said Sikka.
Sikka said the initiatives taken by the company to enhance operational efficiency are aimed at making it "more competitive".
While announcing its results for the March 2015 quarter, Sikka had said the company would aim to boost its revenues to $20 billion from the current $8.7 billion over the next five years, besides improving employee productivity by 50%.
"For us, cost optimisation is not only about improving margins. It is about making us more competitive, with the ability to drive deals profitably," Business Standard quoted MD Ranganath, chief financial officer of Infosys, as saying at the conference.
"We have always said we want (margins) to be 25%, plus or minus. There could be quarterly variation but by and large that is the trajectory," he said.
Analysts believe if Infosys aims to post industry-leading growth, it must eat into the shares of its rivals like TCS and Cognizant.
