Infy looking at buys ‘that make sense’

K Giriprakash Bengaluru | Updated on August 10, 2020

UB Pravin Rao, COO, Infosys   -  BUSINESS LINE

COO Pravin Rao says focus around digital; budget of $100-200 million

Infosys is again on the prowl for acquisitions in the $100-250 million ticket size range, though valuations of potential targets remain the same despite the Covid pandemic.

UB Pravin Rao, Chief Operating Officer, told BusinessLine that while acquisitions continue to be a key element of Infosys strategy, and as a lever to accelerate its capability, “our primary focus is around digital, which would include cloud, data and analytics, cybersecurity, and design and user experience.”

He said Infosys had acquired two companies in the cloud space in the last 12 months. These were Fluido in the Nordic region and Simplus in the US. Previously, it had acquired two companies in the digital experience space. “It is not that there are too many companies out there, and the valuations are still high. Even though one would expect that due to the pandemic, the valuation may have come down but that’s not the case. Because everyone knows that any company in the cloud space, the valuations are going to be high. Therefore, we need to look out for opportunities that make sense for us.”

Pravin Rao said that big-ticket acquisitions are not on the radar as they may only bring complementary skill-sets and in the same space as Infosys. “Hence, we are not looking at acquisition from a scale or revenue perspective. We are looking at it from a capability point of view. I would say the ticket size would be in the range of $100-250 million.”

Bets on tech spending

Pravin Rao said that in the short term, the company does not expect any challenges on the demand side while in the medium to long term, it is expected to come back strongly. “In fact, we believe the tech spending is expected to accelerate and we will start building resilience in our operations and supply chain,” he said.

Even clients have started focussing on enabling remote ways of working with all stakeholders with technology playing a big role in enabling remote ways of working and this pandemic will amplify the trend. Clients are also re-imagining their business models and supply chains to deal with the post-pandemic world as well, the COO said.

In the medium to long term, there will be more tech spend and “we will probably see an unprecedented embrace of digital which will be across industries and geographies,” he said.

Published on August 10, 2020

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