Infosys eyeing acquisitions in data analytics, SAAS segments, says CEO Salil Parekh; sees no layoffs due to AI

After two acquisitions this year, India's second-largest IT services company Infosys is on the lookout to scoop-up more firms and says the acquisition matching scale of recent in-tech buy is certainly a possibility. 

Infosys CEO Salil Parekh told PTI that the company is keen on acquisitions in areas like data analytics, SAAS, and may look at some geographies within Europe, and the US. 

Replying to a query on if more acquisitions could be of the scale matching in-tech, which came with a price-tag of 450 million euros, Parekh said, “Absolutely, I think those would be the size that we will look at in terms of scale, and given our structure we could do a few of those.” 

In January, Infosys announced a definitive agreement to acquire 100 percent of the equity share capital in In Semi Technology Services, a semiconductor design services company headquartered in India, for Rs 280 crore. 

In April, Infosys Germany, a wholly-owned step-down subsidiary, entered into a definitive agreement to acquire 100 percent of the equity share capital in in-tech Holding -- leading provider of engineering R&D services headquartered in Germany -- for a consideration of up to 450 million euros (about Rs 4,045 crore). 

Infosys is eyeing more acquisitions, he said, adding that the company is evaluating several firms. The Infosys CEO, however, said a lot depends on strategic synergies, financial cost, cultural fit and integration aspects. It is tough to put a timeline on the outcome of ongoing discussions, he added 

According to the Grant Thornton Bharat Dealtracker Q2 2024 report, Indian dealmaking saw overall 501 deals, valued at $21.4 billion. The report said the second quarter of 2024 witnessed the highest quarterly volumes since the second quarter of 2022, while values declined due to the absence of big-ticket merger and acquisition transactions. 

Focus on gen AI 

Answering the impact on generative AI, the Infosys CEO said that the technology is evoking strong interest from clients and there is a huge mobilisation of GenAI within Infosys as well. Parekh believes GenAI adoption will increase with time as enterprises experience the benefits and business outcomes arising from it. 

“So we think this will accelerate as time goes on but we will wait-and-watch how it develops. It is a bit like, some years ago we started with digital or with cloud... these things start-off in a certain way... and then we see what benefits clients are getting. If they see benefits are substantial, more and more adoption will happen,” he said. 

Earlier this year, Infosys had said it is working on 225 Generative AI programs for clients, and that over 2,50,000 employees have been trained in the areas of generative AI. At present, Infosys’ work in AI and generative AI is available to its clients through Infosys Topaz. 

“We don’t see any layoffs in Infosys with these new-age technologies, and in fact, we continue to increase our recruiting as the economic environment changes...," Parekh pointed out. 

According to a Deloitte technology trends 2024 report released in April this year, GenAI is revolutionising operations and enhancing customer experiences across sectors such as healthcare, retail, education and agriculture. 

India’s GenAI market is projected to achieve a compound annual growth rate (CAGR) of over 24.4 percent from 2023 to 2030, according to the Deloitte report, which also notes that is India poised to emerge as a global leader in AI innovation, leveraging GenAI to drive inclusive progress and sustainable development. 

On the $3.9-billion GST tax demand, Parekh said Infosys has already given out updates and made disclosures in the market (through BSE filing) and has no further update to share.