Lodestone's $350 million acquisition to help Infosys: Analysts

MUMBAI: Shares of Infosys Technologies were modestly in the green on Monday after the company announced acquisition of Lodestone Holding AG, a global management consultancy firm, for $350 million.

Lodestone advises international companies on strategy and process optimization and provides business transformation solutions enabled by SAP.

In an interview with ET Now, Aniruddha Mehta, research analyst, IIFL, said that the Lodestone acquisition will boost Infosys’ footprint in Europe and give a filip to Infosys’ healthcare segment.

He added that the company has utlilised 8 per cent of its cash for acquisition and can get more downstream revenue from this acquisition.

According to Infosys, the acquisition will add momentum to its 3.0 journey with increased presence in business transformation consulting services. It will also increase the company’s presence in CSI space and solidify position in Europe including near shore centers like Poland and Romania. It will also enhance its footprint in newer markets like Brazil, China and Singapore.

According to Jigar Shah, Senior VP and Head of Research, Kimeng Securities India, this is positive news for Infosys Technologies which is suffering from lesser growth compared to its peers in the software sector.

At 11:00 am, the stock was at Rs 2,494, down 0.08 per cent, on the BSE. It touched a high of Rs 2,527.95 and a low of Rs 2,490 in trade so far.

Analysts say the stock had run-up last week in anticipation of acquisition abroad. The stock is likely to consolidate near current levels before further upmove. According to media reports, Infosys Technologies is also in talks to acquire a Spanish consulting company.