The Hindu Business Line : Aetna ramps down Infosys exposure

AETNA Inc, one of the top 10 clients of Infosys Technologies, has ramped down significantly and its contribution to Infosys's top line is likely to stay flat or shrink further over next quarter, sources said.

Earlier in September, Business Line had reported that Aetna and Northwestern Mutual had cut their rates with the vendor to the extent of 8-10 per cent.

The Infosys management told investors over fourth-quarter earnings call that one of its clients who was close to $50 million had ramped down its exposure to the vendor and hence, the contribution form North Amercia came down in the March quarter.

North America accounted for 65.5 per cent of Infosys's fourth-quarter revenue, down from 72.2 per cent sequentially.

Aetna's contribution to Infosys's top line has been decreasing sequentially and by March-end, was three per cent, down from 5.2 per cent in the quarter ended December and six per cent in the one ended September.

It is understood that in absolute terms, Aetna's contribution has come down from close to Rs 75 crore to Rs 39 crore over the last three quarters.

"We believe that the rate change was effected in the December quarter and since then, Aetna's exposure to the company has been shrinking," a technology analyst with a foreign brokerage firm said.

"But, actually it could be a good trend. Despite decreasing dependence on such big clients, Infosys is growing on a robust pace," he added.

Infosys had announced earlier its plan to double its team working on the Aetna by the year-end.

The Infosys scrip ended at Rs 5,268 on the BSE on Wednesday, up marginally by 0.85 per cent.