Infosys pushing its way to $20 billion mark by 2020

The last time Infosys’ quarterly sequential revenue growth was better than the 4.5 per cent it reported for April-June 2015, it set eyes rolling at ET. That was back in the third quarter for fiscal 2013, when the topline expanded by 6.3 per cent and S D Shibulal was at the helm as CEO.

The stock market loved it, of course, and sent Infosys’ shares soaring 17 per cent. But alas, the Bengaluru-based company’s struggles with growth have continued. Since then, founder N R Narayana Murthy has made a comeback and gone back, and technology wizard Vishal Sikka has been in charge for about a year.

So is today’s show the real deal, then? Is it a harbinger of Infosys’ return to growth leadership?

It was quite simple, really, to say that the revenue growth spike under Shibulal was a one-off. Guidance was left unchanged and management commentary was downbeat. But this time, the acceleration in growth has been accompanied by strong client additions and a bump-up in the annual revenue forecast. Growth has been secular across geographies (with the exception of India) and verticals. The operating margin is down, but it is still healthy. Besides, that is a problem that can be fixed.

That said, it is still too early to assert that clients in ever larger numbers are buying the idea that Infosys offers a superior value proposition. We need to see more evidence to definitely call a comeback. At best, what we have is a good beginning. And a long way to go—remember, the ambition is to take Infosys’ revenue to $20 billion with a 30 per cent margin by year 2020. But Infosys would definitely like to argue that a job well begun is half done.