The past year has been a good one for Infosys, an IT services and consulting firm based in Bangalore, India. The company’s revenue in its financial year from March 2010 to April 2011 reached an impressive $6.04 billion, up 25.8% from the previous year’s figure. Gross profits were up 23.8% at $2.54 billion for the same time period. The firm’s operating income was up 21.8% at $1.77 billion and net income was up 14.2%. Earnings per share drove up 13.9% coming in at $2.62 million.
Those figures are surely a big part of the reason that Infosys’s CEO Senapathy (Kris) Gopalakrishnan was voted top CEO in the IT Services category by buyside analysts on Institutional Investor’s inaugural ranking of Asia’s Top Executives, for 2011. Infosysis comes in second place overall on the ranking.
IT services companies in Asia, in general, experienced a comeback in 2010, a welcome relief after the loss of business that so many endured in the wake of the financial crisis, touched off with the collapse of Lehman Brothers in 2008.
With many companies in the West pulling back on their outsourcing dollars, due to declines in revenue, a knock-on affect hit Indian IT companies hard. But as 2011 rolled in, many US and European companies have been looking to grow their businesses again. IT solutions and services play a big part in that growth.
Infosys took advantage of the upswing in business by expanding its services, offering not only IT solutions, but strategic business partnerships to clients looking to transform their business operations in an effort to increase return on investment, says Gopalakrishnan. The move was a push to grow with the changing business climate. “We believe that there are seven key shifts that are taking place in the world of business that offer immense potential for IT led innovation and growth,” says Gopalakrishna of the move. He identifies them as: digital consumers, new commerce, the healthcare economy, sustainable tomorrow, smarter organizations, emerging economies and pervasive computing. The firm has aligned its investment in new products and solutions around these themes in an effort to partner with its clients to offer better ways to operate their businesses and build new enterprises,” Gopalakrishnan explains.
As part of its rebranding effort the firm also changed its name from Infosys Technologies, on June 16, 2011 to Infosys Limited, signifying its transition over the past year from a technology services firm to a full-scale business solutions organization. The strategy seems to be working. In 2011, Infoysys not only maintained its zero debt initiative, but as of March 30th, 2011 reported $3.8 billion of cash on its balance sheet. The shareholder friendly company also continues to pay up to 30% of post-tax profits a year as dividend to shareholders. This amounts to a regular dividend of Rs 30 ($0.67) per share for full year 2011. Additionally, Infosysy paid a special dividend of Rs 30 ($0.67) per share to its shareholders on October 10th to celebrate its 30th birthday.
Infosys’s sheer size, with a market capitalization of $41.4 billion as of March, 31st 2011, has also been a boon to the company. “The larger companies managed to weather the downturn better and maintained their margins, whereas many smaller companies had both revenue and margin compression during the downturn,” says Gopalakrishnan.
This year, the IT company has been busy developing new solutions and platforms and investing in new avenues of growth including Cloud Computing technology, and sustainability and mobility initiatives. “We are focusing on acquisitions, as well, as a way to increase our footprint,” Gopalakrishna says.
The company’s two-person investor relations team makes sure to spend about 2/3 of its time conducting in-person meetings, site visits, roadshows, investor conferences and conference calls. The team also organizes an “analyst day” each year, one in India, on one of its campuses, and one in New York City to keep analysts and investors updated on key areas of growth.
Gopalakrishnan received his Masters Degree in physics in 1977 and a Masters degree in computer science in 1979, both from IIT Madras, in Chennai, India. He received his Bachelors in Science from University College, Trivandrum, India in 1974. Gopalakrishnan, who is an original founder of the company, when it was created in 1981, will on August 21, 2011, move from his position as CEO and managing director to the post of Co-Chairman with executive powers. The position of CEO and managing director will be taken by chief operating officer S. D. Shibulal.
Looking ahead to 2012, Infosys continues to plan for growth. It currently has 130,000 employees and has guided for 45,000 more workers in 2012. Gopalakrishnan has also been a big proponent of education. “We believe that to create a learning organization our employees must constantly learn and grow professionally through various stages of their development and life,” he says. In 1991, Infosysis initiated its education and research department, and in 2009 created its Global Education Center (GEC) in Mysore, India. The GEC facility, which has the ability to train up to 14,000 people, offers training programs for employees at various career levels, including entry level training for engineering school graduates. The Center employs over 300 faculty members. Gopalakrishnan’s words of wisdom for those looking to get ahead in the world of business at large: Have the courage to take risks and focus on the long-term goals.
