Infosys predicts return to double digit growth

I met up with BG Srinivas, UK head at Indian IT supplier Infosys, today. We talked about the company’s outlook for the next year, amongst other things.

When he joined the company in 1999 it had an annual turnover of $120m and about 3400 employees.

Today it has over 106,000 employees and an annual turnover of $4.7bn.

Srinivas told me today that he remembers will the celebrations when Infosys recorded its first $1bn revenue. That was in its 23rd year of existence about seven years ago. It then only took it 23 months to add another $1bn.

The company has grown rapidly, like its Indian peers, since the year 2000. Much of this was the result of a need for lower cost software development as the Millennium bug approached.

And although the next decade will be tougher Infosys is already confident that growth is back. In its last financial year, Infosys recorded 3% growth. Actually not bad when you consider what a year it was.

But its next financial year, 2010/2011, is expected to see 16% to 18% growth. This assumption is based on the volume of annuity business, the amount of projects in the pipeline and discussions with customers about their spending plans.

Srinivas also said the majority of growth is expected to come in Europe and the US.

To put these figures into some sort of context Srinivas broke up the 16% to 18% figure. Of this he said 40% will come from application and development, 25% to 27% will come from consultancy and software package implementations with the rest provided by infrastructure maintenance and development services, systems integration as well as testing and validation.

So as I have blogged recently the Indian suppliers have not only weathered the storm that was the credit crunch but are emerging strong. This makes sense as most of these companies embarked on their monumental growth in 1999 amid the Y2K storm. A storm in a tea cup compared to the credit crunch.

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