Wednesday, 14 January 2009

UK drags down Infosys in Europe

(By Anthony Miller). I’ve gone through yesterday’s numbers in detail and it’s pretty clear that the UK has been dragging down Infosys’ European growth for some quarters, even accounting for the much weaker pound. As reported (in USD), Infosys’ UK business declined yoy by 21% in the Dec. ’08 quarter to $173m, compared to a 4% decline across Europe (inc. UK) to $299m. For the calendar year 2008, Infosys UK grew 10% to $809m compared to 21% growth across Europe ($1,290). By the way, almost half of Infosys’ UK revenues come from its (global) top customer, BT.

If we use local currencies the overall trend is the same but the UK picture is actually much brighter. In Dec. ’08, Infosys UK chalked up quarterly revenues of £113m (+5%), bringing the calendar year to £439m (+20%). This contrasts with 7% European growth in the quarter and 23% for the year. In any event, these results should confirm Infosys as a Top 20 player in the UK software and IT services market when we publish our inaugural rankings in April.

What’s clear is that Infosys gained share in the UK last year – and this was all organic. I don’t think they will be able to sustain 20% growth in 2009, but I would be surprised if we still didn’t see low double-digits, in what we are sure will be a declining UK market (we will publish our authoritative market forecasts early next month). TCS, the largest of the Indian offshore players both globally and in the UK, reports tomorrow.

No comments: