No subprime impact: Infosys

When the top Infosys management visits Mumbai, it is clear that they want to calm some investor nerves. With banking, finance and insurance as a key vertical, everyone wants to know whether the subprime meltdown in the US markets is going to hurt.

"Our exposure to subprime industry itself is less then 0.5 per cent, so its very less exposure and we are in touch with our clients. Clients are not telling that there is an issue or thing like that, so it does not look at this point of time to be very significant," said Kris Gopalakrishnan, CEO & MD, Infosys Technologies.

So no worries for Infosys then and certainly no noise of reducing how much it will earn, what investors like to call the guidance.

However, tough times are around and with a slowdown in the US imminent, it is clear that IT budgets will come down but that is also a time to hike its dollar rates.

Rupee appreciation

"As long as Rupee appreciation is gradual companies are learning to manage that. In fact, Rupee appreciation is of something new, from 2003 onwards Rupee has been appreciating at about two per cent every year. We have sustained margin inspite of growing cost and things like that. It was only in Q1 because appreciation was significant there was an impact," said Kris Gopalakrishnan.

Besides, it is looking to increase revenue share from non-dollar geographies like Europe that's where the recent acquisitions like that of Philips' BPO fir in.

Over a period of time Infosys wants to scale down US revenue share to 50 per cent from the current 60 per cent and increase Europian share to 30 per cent from the current 26 per cent. And rest of the geographies contributing almost 20 per cent including Latin America and China.

Infosys management says that historically the IT services companies have eventually benefited from the economic slowdowns in the western countries like the US.

But then their is an intermediary period before the outsourcing cycle kicks in all again, clearly the upcoming quarterly numbers of the company will be under a lot of pressure.

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