China no threat to desi IT model: Infy
Infosys Technologies doesn’t believe that China would prove to be a threat to the Indian IT model.
By TNN |
BANGALORE: Infosys Technologies, which is a contender to break into Nasdaq-100 by year-end based on its market capitalisation, doesn’t believe that China would prove to be a threat to the Indian IT model.
The Infosys management believes that India scores on two fronts: wage and project management skills. Chinese wage levels are higher than India by 20%. China, Infosys officials say, also lacks much of project management skills which are critical in execution.Infosys, which like many of its peers, has set up operations in China and expects business rampup. The Chinese operations are critical not just for penetrating into the domestic market but are being positioned to address opportunities in the Far-East, notably Japan.
At an analyst call after this fiscal’s Q1 results, the company’s CFO Mr V Balakrishnan had said that Infosys China as well as Infosys Consulting were in the investment phase. Infosys China had a topline of Rs three crore with a net loss of Rs two crore.
In the interim, India’s second biggest IT exporter is betting heavily on UK, a market which it believes would grow much faster than the company’s average growth rate. Revenue from Europe is reportedly growing at 55% to 60% year-on-year.
But while growth in the UK is robust, the company says adoption in continental Europe — and more importantly Japan — is still patchy, though increasing.
While the company doesn’t give country-wise revenues, it would be pertinent to mention here that share of revenue contribution from continental Europe has been on the rise. In the first quarter ended June 30, 2006, Europe accounted for 26.2% of revenues compared to 25.5% for the fourth quarter ended March 31, 2006. The figure for Q1 of FY’06 was 23.9%.
According to Mr S D Shibulal, founder director and head of worldwide customer sales & delivery, Infosys’ growth in Q1 of the current fiscal was driven by verticals like telecom, financial services and manufacturing services.
Infosys, which has a market capitalisation of over $25 billion, is currently ranked 98 among Nasdaq-100 and would be a strong contender for qualifying into Nasdaq-100. Infosys had qualified to enter Nasdaq’s global select market tier.
The Infosys management believes that India scores on two fronts: wage and project management skills. Chinese wage levels are higher than India by 20%. China, Infosys officials say, also lacks much of project management skills which are critical in execution.Infosys, which like many of its peers, has set up operations in China and expects business rampup. The Chinese operations are critical not just for penetrating into the domestic market but are being positioned to address opportunities in the Far-East, notably Japan.
At an analyst call after this fiscal’s Q1 results, the company’s CFO Mr V Balakrishnan had said that Infosys China as well as Infosys Consulting were in the investment phase. Infosys China had a topline of Rs three crore with a net loss of Rs two crore.
In the interim, India’s second biggest IT exporter is betting heavily on UK, a market which it believes would grow much faster than the company’s average growth rate. Revenue from Europe is reportedly growing at 55% to 60% year-on-year.
But while growth in the UK is robust, the company says adoption in continental Europe — and more importantly Japan — is still patchy, though increasing.
While the company doesn’t give country-wise revenues, it would be pertinent to mention here that share of revenue contribution from continental Europe has been on the rise. In the first quarter ended June 30, 2006, Europe accounted for 26.2% of revenues compared to 25.5% for the fourth quarter ended March 31, 2006. The figure for Q1 of FY’06 was 23.9%.
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According to Mr S D Shibulal, founder director and head of worldwide customer sales & delivery, Infosys’ growth in Q1 of the current fiscal was driven by verticals like telecom, financial services and manufacturing services.
Infosys, which has a market capitalisation of over $25 billion, is currently ranked 98 among Nasdaq-100 and would be a strong contender for qualifying into Nasdaq-100. Infosys had qualified to enter Nasdaq’s global select market tier.
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