How US Presidential election and ​Covid travel curbs might impact Infosys

In terms of pricing, it has been relatively stable in Q2 and we do not anticipate any big changes in the foreseeable future, Infosys CEO Salil Parekh said.

US elections hasn't had impact on deals: Infosys CEO Salil Parekh
Infosys CEO and Managing Director Salil Parekh, explains how the Indian IT bellwether is building a future resilient business model which can work whether Donald Trump or Joe Biden becomes the next US President. He also opens up on the impact on billing rates amid a change in offshore-onsite percentage mix due to Covid-related travel restrictions. Edited excerpts from an interview with ET Now.

How does the growth trajectory looks like?
There is a very good growth trajectory in the areas of digital, cloud, data, cyber security, the internet of things, etc. It is a function of how we bring things together with large transformation programs. If we remain focused on what is relevant for our clients, we see a good future in the coming quarters.


I do not have a good sense of the industry and where that would go. For us, if all our digital investments are focused on what is relevant for clients, it gives us good confidence on what is coming in the future. We do not have a commitment or forecast beyond the end of this financial year where we see a very good future for the digital transformation work.

A favourable offshore-onsite mix because of travel restrictions has worked well as a lot of work got executed offshore. Do you see this trend continuing in a post-vaccine world and how will this impact the billing rates?
Given the travel restrictions, we had a faster move to that offshore-onsite percentage mix. Some of that will be reduced because travel will open up. There is always a mix of work which is not driven purely from a margin consideration, it is driven much more from what is required for the digital transformation work with clients. So we do some of the work onsite and some of the work offshore. A little bit of that will move back to onsite. We also have large digital studios in Europe, US and Australia where some of that work will be done.

In terms of pricing, it has been relatively stable in Q2 and we do not anticipate any big changes in the foreseeable future.
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Deal wins were robust in Q2. Is that continuing into the third quarter as well or are there uncertainties because of the US election next month and recurring virus outbreaks in Europe?
Each quarter is not the same in terms of predictability but over a period of 12 months we have a decent idea of how these deals will evolve. We have not seen any impact today as a consequence of the US election or what is happening in Europe. There is always volatility in quarter-on-quarter numbers. We remain confident that over a period of time we will continue to participate in these large digital transformation programs with our clients.

What scenarios are you pricing in as far as the US presidential election is concerned?
We have build a localisation approach in the past few years to recruit individuals from colleges in the US. We recently announced that we will recruit 12,000 US employees for the next two years. We are building a resilient business model for the future. I do not have a view specifically on the election but our approach has been to build a business which can work under most scenarios within the US system.

As a veteran of the IT industry, you have seen multiple boom and bust cycles. Do you believe that COVID-19 is going to be the most significant one in terms of growth and potential?
The opportunity we have in front of us in technology services is just incredible. Around the world, more and more large enterprises are going through changes which support the digital infrastructure. We are positioned well there. We are providing the right capabilities, skills and insights. It is a massive and fast growing opportunity. I am extremely optimistic that as long as we are focused on that digital and cloud opportunity, the coming years would be very positive for the technology business.
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