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Acquisitions to bring in $1.5 bn additional revenues: Infosys

Infosys expects acquisitions to bring in additional revenues of about USD 1.5 billion as the IT services behemoth aims to achieve an aspirational goal of USD 20 billion in topline by 2020.

The country’s second largest software services firm is also aiming to bring attrition levels down to the lowest in the industry in the same time frame.

“The mission of our management is to prepare the company to achieve an aspirational goal of USD 20 billion in revenue by calendar year 2020 with at least 30 per cent operating margin with specific targets,” Infosys CEO Vishal Sikka said in the company’s annual report.

These targets include increasing revenue per FTE (Full Time Equivalent) to USD 80,000 by deploying automation and innovation in existing businesses and inorganic investment strategies influencing approximately USD 1.5 billion of new revenue.

The Bengaluru-headquartered company has been scouting for innovative companies in areas like automation and artificial intelligence.

In February, Infosys had announced its first major acquisition under Sikka, who had taken over as CEO in August last year, of New Jersey-based automation technology firm Panaya for USD 200 million.
In April, Infosys made another large acquisition and bought Kallidus (also known as Skava) for USD 120 million.
The IT firm has already said it is open to ‘bigger scale’ mergers and acquisitions but with a caveat, it is not interested in “yesterdays” companies.

Sikka said new services like design thinking, solutions in artificial intelligence and intellectual property-led businesses are expected to contribute at least 10 per cent of Infosys’ revenues.

Infosys will also focus on building a vibrant ecosystem “from the ground up by investing in, incubating and growing innovative startups and companies that will help define the next generation of services and business models,” he added.

Once the bellwether of Indian IT industry, the company lagged behind its peers like Tata Consultancy Services and HCL Technologies in terms of growth.

It also faced a series of senior level exits that the company has now capped with a series of measures like promotions and increments.

The target would also be “bringing attrition levels down to the lowest in the industry and achieving at least 25 per cent in diversity in our top leadership”, Sikka said.

On standalone basis, the attrition rate for fiscal 2015 stood at 18.9 per cent compared with 18.7 per cent in the previous fiscal.

Infosys has over 1.76 lakh employees with the addition of 15,782 (net) people. Sikka also expressed confidence that the company can grow at 10-12 per cent rate in the ongoing fiscal.

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