infosys: See very good opportunities in M&A environment; will evaluate entities offering good fit: Infosys CEO

The current environment is throwing up “good opportunities in the merger and acquisition space”, Infosys CEO Salil Parekh has said, adding the Bengaluru-headquartered IT firm will look at companies that offer strong strategic and cultural fit.

While Infosys is on “look out at all times” for good acquisitions, “this is a good environment for finding it”, Parekh said.

Infosys is seeing “very good opportunities” in the M&A environment, he observed.

“…and this is a good environment. We have a very strong balance sheet, a very good way to deploy it. If we find a company or an entity which fits in strategically but also culturally, and we have a way of integrating it, we will look at that,” Infosys top honcho said during the Q4 earnings conference recently.

He was responding to a question on whether the weak US macro environment and the global uncertainities are offering lucrative opportunities in the merger and acquisition space.

Infosys this week reported lower-than-expected growth in the fourth quarter net profit and gave a weak 4-7 per cent revenue growth guidance for FY24 amid the tightening of IT budgets by clients following turmoil in the US banking sector.

India’s second-biggest software services firm posted 7.8 per cent year-on-year growth in consolidated net profit at Rs 6,128 crore in the January-March quarter. But the profit fell 7 per cent when compared to the preceding October-December quarter. The revenue growth in constant currency for FY23 came in at 15.4 per cent, lower than the guidance. Infosys’ Q4 year-on-year-growth was 8.8 per cent and the sequential decline was 3.2 per cent in constant currency terms.

Revenue rose 16 per cent year-on-year in the fourth quarter of FY23 to Rs 37,441 crore but represented a decline of 2.3 per cent when compared to December 2022 quarter.

Infosys expects to post revenue growth of between 4 per cent and 7 per cent for the fiscal year ending March 2024, lower than analyst expectations. The conservative guidance came on the back of ongoing upheaval in the US banking system and an uncertain global economy.

Stay on top of technology and startup news that matters. Subscribe to our daily newsletter for the latest and must-read tech news, delivered straight to your inbox.