At Infosys, the new management structure is robust and will work, without any conflict of interest between the two Presidents reporting to him, said S. D. Shibulal, CEO, Infosys. He also shared his views on the demand environment and spending from clients in an interview with Business Line . Excerpts:

You have a new structure that is drawing comparisons with Wipro – which had a twin CEO model. Could that lead to a conflict of interest?

There is no portfolio overlap between the two presidents. Both the Presidents have their own portfolios and it is the need of the hour for us. For example, B.G Srinivas is in the market-facing role while Pravin Rao is in charge of delivery in India. Both of them have undertaken sales and delivery roles. Portfolios don’t overlap though functionally they are intertwined. There is a tremendous synergy between them.

How are you seeing the demand environment, especially in the light of Accenture reporting a decent set of numbers?

We have seen marginal improvement in clients’ confidence, but they are still reluctant to take large outsourcing decisions. A lot of it has to do with the fact that while Fortune 500 companies are sitting on large cash piles, their topline is not growing as per their expectations; having said that, their focus continues to be on cost reduction and use of technology to reduce total cost of ownership . Budgets are generally decided by the end of this year.

What is the sense you get from clients, especially with news of Fed tapering its bond-buying programme and a marginal improvement in the US unemployment numbers?

From our conversations, we understand that budgets will be flat going ahead but some verticals are seeing improvement. For example, the holiday season impact has been positive on the retail industry. We still have to wait to see how that will pan out.

Early indications from some of the retailers seem to be that the holiday season has not had much to cheer?

While there are some concerns on the physical stores side of things, online is picking up. We continue to partner with a lot of retailers on their various digital initiatives.

Do you see any improvement in margins?

Margin increase comes from a variety of factors — the onsite-offshore mix, coupled with increased productivity. We have seen improvement in margins as a result of this, and better utilisation (which is 78 per cent when compared to 77.7 per cent in the September quarter) has improved margins.

Are discretionary spends starting to come back?

They will be in the cloud, social, mobility, digital and business analytics areas.

venkatesh.ganesh@thehindu.co.in