MOSL: INFOSYS (Buy)-Stability (FY19) -Momentum -Accelerate (FY21)-Granular strategy articulated around Digital, Core
INFOSYS: Stability (FY19) à Momentum à Accelerate (FY21); Granular strategy articulated around Digital, Core, Sales and Talent
(INFO IN, Mkt Cap USD38.9b, CMP INR1183, TP INR1330, 13% Upside, Buy)
- On its Analyst Day, INFO's new CEO Mr Salil Parekh shed more light on the four pillars of its strategic plan: [1] scaling agile digital, [2] energizing the core, [3] re-skilling people and [4] expanding localization of talent.
- INFO's well-articulated strategy in digital, sales, talent re-skilling and localization, coupled with the USD2.79b base of digital revenues, provides a good base to kick-off its next innings. With previous distractions behind, INFO's focus is back on execution.
- The company cited that FY19 will be a year of stabilization, FY20 a year of momentum building, and FY21 a year of acceleration. It, however, refrained from divulging any further details about the implications of this strategy on its absolute/relative financial performance.
- With the benefits from productivity levers such as automation becoming visible, INFO indicated that pricing is not as big a concern and that the margin guidance cut is a function of ~USD100m worth of investments made to build capabilities imperative for the execution of its strategy.
- INFO's USD2.79b revenue base puts it in a strong position in the USD160b+ market, which is growing at more than 15%. It cited that knowledge of clients' core technology environment is a huge advantage, which, combined with energizing the core, means that firms such as INFO are best placed to drive Digital story.
- Its investments in sales & marketing will focus on six imperatives: [1] branding, [2] injecting digital specialists into accounts, [3] scaling large accounts, [4] shaping large deals, [5] acquiring new accounts and [6] enabling sales via continuous anytime-anywhere learning.
Infosys is a global technology services company based in India. Co. provides business consulting, technology, engineering and outsourcing services. Co.'s end-to-end business solutions include: Consulting and Systems Integration - consulting, enterprise solutions, systems integration and advanced technologies; Business IT Services - application development and maintenance, independent validation services, infrastructure management, engineering services comprising product engineering and life cycle solutions and business process management; and Products, business platforms and solutions, including Finacle™, which addresses core banking, mobile banking and e-banking needs of banks worldwide.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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