July 13 (Reuters) – Infosys Technologies (INFY.BO) raised its forecast on a revival in outsourcing demand from its mainstay financial clients, but its shares fell as markets worried a weak European economy could curb orders.
India’s No. 2 outsourcer reported a surprise 2.6 percent drop in April-June profit and its sales contribution from Europe fell to about 20 percent from nearly 25 percent a year ago and 23 percent in January-March.
For a story on the company’s results and outlook, see [ID:nSGE6680B5]
Following are comments from senior company officials after the result.
V. BALAKRISHNAN, CHIEF FINANCIAL OFFICER
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ON DEMAND ENVIRONMENT:
“There are good times and bad times. Good times because there is a lot of spending happening from all customers. All the large economies are in distress; when the economies are in distress outsourcing increases. That is what we have seen in this quarter also. The bad thing is all the macro economic indicators are very bad so we have to closely watch them.”
ON EUROPE:
“We are not hearing anything from clients till now. We are not seeing any impact on the ground but that is something we have to watch out. If it becomes a larger issue then it could have an impact. Right now, it looks manageable.”
ON PRICING:
“When the economy stabilises, when all the clouds go away probably we will have pricing power.”
S.D. SHIBULAL, CHIEF OPERATING OFFICER
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ON DEMAND:
“Overall, we are cautiously optimistic. We see caution all around but mostly in Europe. The U.S. clients have started spending. We are seeing traction in multiple segments.”
ON EUROPE:
“Europe, there are still concerns, local concerns as well as tail effects of the previous recession. Of course, Europe entered the recession late and we believe it will also come out late. “We believe that Europe will lag behind the U.S. for may be another quarter or two.
“Aspirationally, Europe is very important for us. We expect that Europe will be eventually about one-third of business in the long run. At the same time, we expect some challenges in the medium term.”
ON PRICING:
“Our pricing is stable at this point. We are seeing occasional renegotiations actually both upwards and downwards. It’s part of our regular business. We are not seeing any unusual activity.” (Reporting by Bharghavi Nagaraju; Editing by Ranjit Gangadharan)