The Hindu : Business : Infosys to become $2 b co

Online edition of India's National Newspaper
Sunday, Jun 12, 2005

Business

Business

Infosys to become $2 b co

Special Correspondent

BANGALORE: Infosys Technologies is on course to become a $2 billion company in fiscal 2006, its Chairman, N. R. Narayana Murthy, said here on Saturday.

Tracing the growth of the company from a band of seven in 1981 to over 36,750 Infoscions and Rs. 61,000 crore in market capitalisation on March 31, 2005, Mr. Murthy said the company's future success hinged on its ability to manage rapid growth.

"We have all the ingredients in place to manage growth — best-in-class talent, scalable processes, integrated systems and state-of-the-art infrastructure. The restructuring of our organisation into integrated business units has created more focussed and aligned teams. We have also scaled up our education and leadership development infrastructure,'' he said while addressing shareholders at the 24th Annual General Meeting.

The company's liquidity policy has been dictated by its Return on Capital Employed (ROCE) and Return on Invested Capital (ROIC). "Our goal is to earn an ROCE that is at least two times the cost of capital and an ROIC that is at least three times the cost of capital. Our dividend policy dictates that we limit the dividend payout to not more than 20 per cent of the net income in a year,'' he stated.

The IT industry is operating in a market place where client preferences are changing rapidly. Corporations now recognise the role of offshore development in improving a firm's core capabilities. "As a result, corporations have moved away from the one-size-fits-all approach to outsourcing,'' he noted.

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