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New strategy to make Infosys more relevant to clients, says Kamath

PTI 10 Jun 2012, 18:30:43 IST
Bangalore, Jun 10: With Infosys finding it difficult to retain its benchmark status in the IT industry, its chairman K. V. Kamath, on Saturday, said the company's new strategy would help it become ‘more relevant' to clients and drive superior growth in future.

“We have announced our new growth strategy — Infosys 3.0 — to address those challenges and enable us to achieve high quality industry-leading growth,” Mr. Kamath told shareholders in his maiden address at the Infosys' 31st Annual General Body Meeting here. He took over as Chairman from Infosys founder N. R. Naryana Murthy in August last year.

In April, Infosys posted 27.4 per cent rise in the fourth quarter profit but could not meet its own revenue estimates for the said quarter ended March 31. It also gave a lower-than-expected revenue growth guidance of 8-10 per cent for full year that was below Nasscom's 11-14 per cent estimate for the Indian software services industry in 2012-13.

Mr. Kamath said Infosys continued to make focused investments in its organisational capabilities, but at the same time it must align its offerings more closely to the business priorities of its clients.

“With that broad objective in mind, we have regrouped our service offerings under four heads, namely, financial services and insurance; manufacturing; energy, utilities, communications and services and retail, consumer packaged goods, logistics and life sciences.

“I am confident that this new strategy will help the company in becoming more relevant to clients and help in driving superior growth in future,” he said.

Mr. Kamath also said the IT services industry was facing twin challenges of commoditisation and scalability.

The demand was shifting from traditional horizontal offerings to industry-specific high-value offerings, he said.

Clients were looking for transformation partners to help them reduce their capital expenditure by converting them into opex (operating expenditure), thereby, increasing their return on investment, he added.

Last year had been hectic for Infosys with key management changes, reorganisation of the company and implementation of the new Infosys 3.0 strategy, while facing an uncertain global economic environment, Mr. Kamath said adding, “Yet we have done well under the circumstances.”

In rupee terms, the company's consolidated revenues grew by 22.7 per cent year-on-year and the net profit after tax grew by 21.9 per cent year-on-year, he said.

“We have added 172 new clients, taking the total client base to 694 during the year under review,” Mr. Kamath said.

Mr. Kamath announced a final dividend of Rs.22 per share and a special dividend of Rs.10 per share on account of the 10th year of operations of subsidiary company Infosys BPO Limited.

The company had earlier paid Rs.15 per share as interim dividend totalling in all to Rs.47 per share as dividend for the year.

Mr. Kamath said the company had ended the year under review with Rs.20,968 crore in cash and cash equivalents.