Kamath prods Infosys to make large acquisitions
25 Jun 2012
Infosys' first non-promoter chairman K V Kamath has nudged the company's top leadership to use the company's huge cash pile for expansion through acquisitions rather than going through the slow pace of organic growth.
Infosys is sitting on a cash pile of $4 billion – over twice the cash with the country's top IT firm TCS – and, at the company's annual general meeting held on 9 June, Kamath is reported to have discussed the issue of using the cash for acquisitions.
"Kamath is known for his abilities of quick decision-making and risk-taking and he is upset that Infosys has been mostly attracting flak from the media, analyst and investor communities in the past few quarters. He feels the immediate best thing for the company would be a mega buyout. But it is taking time for him to convince the conservative Infosys board," reports quoting a senior executive in the company as saying.
Infosys has forecast an 8-10 per cent increase in sales during the current financial year, compared to Cognizant's 20 per cent.
The conservative Infosys management tags growth prospects to cross-currency movements and has forecast lower revenues and profit as clients delay IT spending.
On the other hand, other IT majors like TCS, Wipro and HCL are more optimistic, although they do not provide annual forecasts.
