Infosys is scouting for acquisitions in the healthcare and life sciences segment, an area that contributes around 7 per cent to its revenues, as it looks to catch up with Cognizant and Wipro.

Addressing analysts at the Morgn Stanley India Summit, Infosys COO Pravin Rao said that while it has not decided on the size of the acquisition, the company will use the $500-million innovation fund to acquire companies that have a mix of technology, marquee clients and access into new geographies in markets like US and Europe. Currently, Infosys gets around $600 million from healthcare and life sciences business.

Infosys, which has been reluctant to take the inorganic route despite having more than $5 billion in cash, has been trying to change that approach since a few months. It has acquired Panaya, an automation technology firm for $200 million in an all-cash deal. Similarly, in the fourth quarter of FY 2015, it acquired Kallidus.

The management believes that acquisitions are looked at with multiple objectives. “These businesses help us internally too and we also get to know how they bring in automation and newer ways of business delivery,” said Rajiv Bansal, CFO of Infosys. India’s second largest software exporter is making these moves at a time when rivals Cognizant and Wipro have a sizeable presence in the $3-trillion US healthcare market.

While Wipro is expected to hit $1-billion revenue from this vertical by the end of this financial year, Cognizant gets around $879 million from this vertical.

In the analyst call, the management emphasised on financial services, where focus was on modernising old IT systems. Similarly, automotive, healthcare and hi-tech were seeing good traction.

However, Rao said that Infosys is cautious about energy and utilities, while telecom contributed 20 per cent to its revenues.

comment COMMENT NOW