Mysore (Karnataka), July 12 (IANS) Indian IT bellwether Infosys Ltd is upbeat on sustaining double-digit growth this fiscal (2011-12) too but unsure of the IT spend by its clients due to uncertainty, inflation and sovereign debt crisis in Europe, a top company official said Tuesday.
"Though growth has returned and IT budgets are the same, the concern is over when the spending would happen, especially discretionary spending as there is delay in decision-making due to uncertainty, inflation and sovereign debt crisis in Europe," Infosys chief executive S. Gopalakrishnan told reporters here.
Hoping that the world would overcome the present economic crisis brewing from the $150 billion Greek sovereign debt crisis and defaults in Spain, Portugal and Ireland to an extent, the company's co-chairman-designate hinted at delays in decision-making by clients due to volatile environment.
"Since the world economy revived after the collapse of the $600 billion Lehman Brothers in September 2008 and the IT industry withered the global recession, there is confidence in overcoming the twin crisis of inflation and sovereign debt, which have impacted the GDP growth rate of Europe," Gopalakrishnan asserted.
With North America accounting for 64 percent of its revenue, Europe is the company's second largest export region at 21 percent for its software services and products, while rest of the world accounts for 12 percent and India 2.6 percent.
"At the same time, we are making significant investments in technology and people to take advantage of the emerging opportunities from cloud computing and regulations being put in the financial sector worldwide to prevent a repeat of the sovereign risk being witnessed by some of the European countries," Gopalakrishan noted.
The over $6 billion IT major is investing in Europe, specially France and Germany in capacity building to offer consulting, system integration, application development and product solutions
"We are not seeing any reduction in client's IT budgets but some delays in deciding when to spend due to volatile environment. Though we are cautious, we are investing to grow faster going forward, the executive said.
"If you look at Europe, inflation and sovereign debt are twin issues impacting the GDP growth. We are seeing a flat growth environment in Europe."
Noting that the company's strategy was to expand its presence in the market and increase its footprint in France and Germany, Gopalakrishnan said the impact of investments would be felt over the next three-five years.
"It will be measured by the number of deals we win over the coming quarters," he added.
The company, however, declined to comment on the probe being conducted in the US law courts against the alleged misuse of H1B visa by its on-site employees as the case was sub-judice.
"There is no update on the status of the cause, which is sub-judice. We are working with the US authorities to resolve the issues and the nuances in the usage of these visas. We cannot tell when the issue will be behind us," Gopalakrishnan said.
Admitting that its overseas employee Jack Palmer was still on the company's rolls despite dragging it to the court on the alleged misuse of short-term visas, the top executive said different interpretations of the myriad visas have led to some problems, which were being looked into by the industry body (Nasscom) and the Indian government.
"This is an industry issue and Nasscom and other associations are also working together to provide support. Am sure, that the (Indian) government is also ready to support in any way it can in this regard," he pointed out.
The company is also responding to queries raised by some of its clients to their satisfaction.