Infosys: little impact from US slowdown

By Dhanya Ann Thoppil

BANGALORE (Reuters) - Infosys Technologies (INFY.BO: Quote, Profile, Research, Stock Buzz), India's second-largest software services exporter, sees little impact from the U.S. economic slowdown as it was able to add new clients in the financial services sector, its chief executive said.

Indian software services companies typically get more than half of their revenue from the United States and some have feared that the downturn in the world's largest economy would hurt the outsourcing industry.

"To date, we have not seen any impact which cannot be managed -- in the sense that there is a small impact, but it is getting replaced with new business and new opportunities," S. Gopalakrishnan said at the Reuters India Investment Summit on Friday.

Along with the client additions, the company has even managed to get small rate increases, in some cases over the last month, he said.

"Early indications and my own reading is that like in 2001, the offshore IT services business should continue to grow," Gopalakrishnan said, adding the company needs to wait until early next year, when the budgets are set, to get a better feel.

He expects IT budgets of U.S. clients to be flat to lower for 2008, with any cut being in the 2 percent to 3 percent range, but said the company would still be able to maintain higher prices as its customers are willing to pay more.

Infosys also plans to continue growing its banking, financial services and insurance (BFSI) segment, which comprises 37 percent of its total revenue, despite the credit crisis in the United States.

"We are not taking any initiatives to reduce our exposure to this (segment) because we have significant opportunities, presence and investments, and clients continue to spend," he said.  Continued...