Companies & Sectors
IT budgets to be flat in 2016: Infosys
Bengaluru : Spending by global enterprises on information technology (IT) in 2016 would be same as in 2015 or less due to global uncertainty, a senior Infosys executive said on Thursday.
 
"IT budgets for this year (2016) are yet to be finalised. As global uncertainty continues, we expect budgets to be flat or less than in last year," Infosys chief operating officer U.B. Pravin Rao told IANS here.
 
Though non-discretionary spend, required to man and run IT operations will continue across verticals, especially in the financial and other services, discretionary spending on new projects, new services and new products will depend on growth and business needs.
 
"As clients want more for less, we are cutting their costs through automation and artificial intelligence to drive their growth by other means," Rao said after the global software major reported robust performance in a weak and tough third quarter of 2015-16.
 
As enterprises reduce cost of their IT operations and use smart technologies like cloud, mobility and data analytics to minimise overheads, vendors like Infosys are made to add value to their services to retain clients and sustain growth.
 
With crude oil prices plummeting to a record 12-year low (below $30 per barrel), the IT major's clients in the energy sector, especially oil and gas are unlikely to have discretionary spending till they recover from the present slump.
 
"As energy sector is under pressure, we do not foresee discretionary spending by its customers till oil prices recover substantially," Rao admitted.
 
With global economy on downslide and IT users wary of investing more than required in the short and medium term, the outsourcing major is doing its best to retain clients through volume growth despite billing pressure.
 
"We have done well in a quarter considered tough due to furloughs, holidays or less working days and headwinds in a few verticals such as energy, manufacturing and telecom while retail was soft," Infosys chief executive Vishal Sikka told IANS.
 
Nothing that visibility was less as it was traditionally a weak quarter being year-end for most of its global clients who operate on calendar year (January-December), he said sequential growth and new multi-million dollar deals demonstrated that the company was resilient to ward off headwinds and stay on course in line with the revenue guidance revised for this fiscal.
 
"Our revised guidance, however marginal, shows we will be back to the industry growth in double digits by end of this fiscal (March 31) by sustaining our growth momentum seen in second quarter (July-September)," Sikka added.
 
Admitting that volatility in foreign exchange and a depreciating rupee had impacted operating margins, chief financial officer M.D. Ranganath said operating profit was negative sequentially and annually.
 
"Though we benefited from a weak rupee as non-operating income, it was offset by offshore costs and cross currency volatility," he pointed out.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

Punita Kumari Sinha, wife of MoS (Finance) Jayant Sinha, appointed Infosys director
Bengaluru : Global software major Infosys Ltd on Thursday appointed noted investment manager Punita Kumar Sinha, wife of union Minister of State for Finance Jayant Sinha, as an independent director on its board.
 
In a regulatory filing to the Bombay Stock Exchange (BSE), the IT bellwether said Punita Kumar Sinha was appointed as an independent director with effect from Thursday.
 
Her appointment comes in place of Carol M Browner, who resigned as a board member on November 2015.
 
In a brief profile in the filing, the company, however, did not mention that Punita's husband is a minister in the the central government.
 
Sinha is the son of former finance and external affairs minister Yeshwant Sinha in the previous NDA government (1999-2004) and Punita Sinha is former senior managing director at The Blackstone Group.
 
The news about the appointment came on one line on page four of the seven-page press release on its third quarterly results under "Board Changes" and had no detail about her.
 
Punita Sinha is also a founder and managing partner of Pacific Paradigm Advisors, an independent investment advisory and management firm, focussed on Asia.
 
Her appointment and its announcement without details came under flak in the social media, as she is a wife of a union minister with an important portfolio (finance).
 
Congress MP Rajeev Shankarrao Satav tweeted: "Infosys Appoints Punita Sinha, Wife of Jayant Sinha, as Director. Clear case of #Nepotism?"
 
"Her Husband has a Day Job 'Union Minister of State, Finance' and She is privy to Govt's Financial Policies," said user Pankaj Tiwari.
 
Besides Punita, outgoing independent director Jeffrey S Lehman was re-appointed for a two-year term from April 14, 2016.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

COMMENTS

PPM

1 year ago

I don't think she bring-in any value to INFY and the appointment may be due to pressure from the Minister.

5 Worst-performing Sectors of the Past Year
Low commodity prices weigh in on many sectors
 
The last one year has been challenging for equities in India. The benchmark Sensex has declined by around 7% to around 24,934 on 8 January 2016 from a level of around 26,900 on 7 January 2015. However, times have been far more difficult for a few sectors.
 
The worst performing sectors over the last one year have been steel, oil and gas, non-ferrous metals, construction and infrastructure, and banks. These sectors have destroyed shareholders wealth to about Rs4.27 lakh crore over the past one year. Low commodity prices have weighed in on steel, oil and gas and non-ferrous metals sector. 
 
 
Steel has been the worst performing sector with it declining by a whopping 39% during the past one year. The sector has been facing headwinds because of fall in global steel prices and cheap imports from China. Steel industry's woes are compounded by the fact it is excessively leveraged with a debt of around Rs1.96 lakh crore. When the times are challenging, debt pinches a lot more to shareholders as the bottom line is greatly affected by interest costs. Steel, as a sector, has high operating and financial costs leading to huge decline in shareholders wealth during tough times. Tata Steel, Steel Authority of India Ltd (SAIL) and JSW Steel are the three major steel companies in India. Tata Steel and SAIL have performed very badly, while JSW Steel's market capitalisation has remained stable during the period. 
 
With drastic decline in crude oil prices over the last year, oil and gas exploration sector has been another major laggard. State run oil major Oil & Natural Gas Corp Ltd (ONGC) has lost an around Rs92,000 crore of market capitalisation. Private upstream oil company Cairn India has also performed extremely badly during the year. 
 
Non-ferrous metals are another sector that has not performed well over the past one year, having declined by 24%. Aluminium major Hindalco led the fall with its market capitalisation nearly reducing by half to Rs14,900 crore. The company is laden with a huge debt burden. Other major companies, which contributed to the fall are Hindustan Zinc, National Aluminium Co Ltd (NALCO) and Hindustan Copper. 
 
Infrastructure sector's woes continued in 2015 with the sector losing 14% of market cap. Infrastructure company Larsen and Toubro Ltd (L&T), whose stock price has been under tremendous pressure since past six months has led the decline. The scrip has lost nearly Rs30,000 crore of market cap during the last one year. Another major contributor to the decline in absolute market cap is Adani Ports & Special Economic Zone Ltd, which has lost around Rs16,466 crore of market cap. 
 
Though the fall in banking sector is lower at 12%, the decline in terms of absolute market capitalisation is the highest for this sector at Rs1.47 lakh crore. The fall in benchmark rates by Reserve Bank of India (RBI) during the last one year seems to have failed to cheer this sector. One of the main reasons for this below average performance is concerns on the non-performing assets (NPAs) front. The highest decline in terms of absolute market capitalisation has come from state-run major State Bank of India (SBI) and private sector lender ICICI Bank. Among others, HDFC Bank and Kotak Bank have performed well during this period. The banking sector along with software, contribute the most to the market cap of India's bourses.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)