Category Archives: Media Mentions – Greyhound Knowledge Group

Street patient for Infy while Sikka makes right moves #Press #Media #BusinessStandard

Analysts say no performance pressure on Sikka for at least two quarters

Even as big hopes have been pinned on Infosys’ new Chief Executive Officer Vishal Sikka, experts believe that the Street is in a patient wait-and-watch mood and there won’t be a pressure for performance on the first non-founding leader of the Bangalore-based company for at least a couple of quarters.

While investors have been waiting for a sharp turnaround in Infosys’ performance for several quarters now, analysts are of the view that it is widely accepted that Sikka would need a few quarters before being able to show any results in the company’s bottomline.

Reflecting this sentiment, shares of have outperformed the information technology sector index onsince the company announced the appointment of Sikka as its next CEO. While the S&P BSE IT index rose 5.6% during the period, shares of Infosys have risen 10.1%.

“We cannot judge Sikka based on one quarter performance; that would not be right. We need to give him at least two to three quarters to show some substantial results. Until then, we need to sit tight and wait,” said Manish Bahl, vice president at independent technology and market research company Forrester Research.

“There is no doubt that Infosys needs to get back on a high growth trajectory soon, but nobody is expecting Sikka to do that over night. There is a broad understanding among the investor community that Sikka’s efforts will take time to reap benefits, and thus everyone is patient,” said an analyst with a leading foreign brokerage house on condition of anonymity.

“Even if Infosys’ performance in the next two quarters is not very impressive, I don’t think investors will get flustered about the company’s prospects or doubt Sikka’s capabilities,” he added.

Sikka, who comes from a non-IT services background, has already made a few early moves at Infosys, which analysts believe are in the right direction.

Among other things, Sikka announced 5,000 promotions within the first week of his joining Infosys at the beginning of this month. Experts believe the move is likely to boost employees’ moral and also help in taming the all-time-high attrition level, which is one of the primary concerns for Infosys currently. For the quarter ended June 30, 2014, Infosys’ attrition rate was at 19.5 per cent, the highest ever at the company.

Additionally, according to an update by Sikka on micro-blogging website Twitter, he spent time with several of Infosys’ senior leaders in the US during an off-site over the previous few weeks. Experts are of the opinion that the activity will help the existing top-leaders of Infosys to understand and adapt to Sikka’s strategy more smoothly.

Analysts have time and again said that a smooth acceptance of Sikka by the existing senior leaders at Infosys is of prime importance, as this is the first time that the company has brought on board a CEO from outside. While it was widely anticipated that Infosys might see more senior-level exits after Sikka’s coming on board, none of that seems to have happened so far.

“In the short term, Sikka will need to build internal confidence. Getting a buy in from senior management, addressing investors, areas of improvement, becoming more hand on to the business are key focus areas that he will need to look at,” said Sanchit Gogia, chief analyst and CEO of Greyhound Research, an independent IT and telecom research and advisory firm.

“In the mid-term, Sikka will need to further partnerships and alliances particularly in emerging tech and markets. Attrition is one aspect that requires monitoring, setting of mid managers; investing in people is going to critical in midterm. Sikka will personally add immense wealth to alliances with product firms and to the hived off software firm.”

Source: The Business Standard

IRCTC Windows app dissapoints users #Press #Media #TheEconomicTimes

In September last year, the ministry of railways quietly announced an application for users of its e-ticket portal Indian Railway Catering & Tourism Corporation Ltd (IRCTC), but made it available only for Windows phone and Windows 8 device users, who account for less than 10 per cent in the Indian market.

The app, which is available free-of-cost on then Windows store, has been rated four stars by 2,199 users since September 2013, when it was launched. However, most users of the Windows operating system who have tried to use the app have been disappointed so far.

“The app requires you to generate a TPIN before logging in. It took me multiple tries and over 30 minutes before I gave up the attempt,” said city-based school teacher Prerna Maggu.

“I managed to generate the TPIN, but when I tried to book a ticket, the site was down for maintenance,” said Bangalore-based IT professional Mayur Naidu.

Reviews like these abound on the Windows Store. Problems range from not being able to book or cancel tickets, to slow connection issues and the app not syncing with the online application.

The app can be used to “plan a trip, make railway reservations, check the PNR status and perform all the tasks already available on the IRCTC website,” the press note from the railways ministry had said last year.

Last week, the ministry had announced a Train Enquiry Mobile App on the Windows platform, which will be followed by an Android version soon.

In the second quarter last year, the Android operating system accounted for 91 per cent of the Indian market, according to market research firm International Data Corporation (IDC) data. Only 5.4 per cent of Indian users preferred Windows OS. According to CyberMedia Research, Windows platform accounted for 3 per cent and 1.5 per cent of the India smartphone market in the first and second quarter, respectively, this year.

“It is a very misplaced strategy for India. IRCTC has not done its due diligence,” said Greyhound Research CEO Sanchit Vir Gogia. “An app that serves a large section of the public should not be limited to one vendor,” he added.

Similar to IRCTC, Jet Airways had also launched an app exclusively for Windows in May last year. It later followed it up with apps for Android and Apple’s iOS to cater to a wider user base. The IRCTC has not announced plans to develop its app on any other OS so far.

Several attempts to reach IRCTC officials did not elicit a response. “Microsoft helps entities such as IRCTC develop an app, but once it is up and running, it is the responsibility of the publisher to maintain it and ensure smooth functioning,” a Microsoft spokesperson said.

Source: The Economic Times

Offline vendors using e-comm sites for bulk buying #Press #Media #HBL

Taking advantage of huge discounts available on online retail portals

Products, especially those that are not available in these cities, are a major draw. The businessmen buy these products from various e-commerce sites and sell it to consumers through physical shops.

“Whether it is a carton of shampoo or facial cream, these customers are ordering in bulk to set up their shops. So we are creating a market place for those vendors for products that are not available in those cities or towns and also with better offers (discounts),” Sanjay Sethi, co-founder and Chief Executive Officer, ShopClues, told BusinessLine.

Cost-saving step

Another advantage is that they do not have to travel to wholesale markets like Chandni Chowk or Nehru Place in Delhi to buy the required products as they are available at the click of a button. “We have more than 70,000 merchants listing for their products on our site and by end of this year we will probably reach around 1.50 lakh merchants. We are selling more than one million products (excluding books) and we will do around 1.50 million products by the year-end,” Sethi said.

Similarly, HomeShop18 said that the emerging cities in India are on a high growth trajectory and the future demand drivers for virtual retail in India.

With increasing adoption of TV and Internet, the small towns and cities are collectively consuming more than the metros when it comes to virtual shopping, the company said.

“These are exciting times and we are seeing the industry evolve rapidly. Most of our audiences live in tier-II and tier-III cities. HomeShop18 has seen a boom in demand for a wide range of brands that might be unavailable in these cities due to a lack of physical retail presence,” Sundeep Malhotra, Founder and CEO, HomeShop18, said.

To cater to this demand, traders and merchants in small towns place bulk orders for products across categories, he said, adding that some of the most popular categories in terms of bulk purchase are mobiles and tablets, apparel, and home and kitchen.

HomeShop18 is seeing demand from small towns in Guwahati, Jammu, Lucknow, Patna, Bhubaneswar, Surat, Nagpur, Darbanga, Agartala and Chandrapur.

“Customers from tier-II and -III cities form 40-45 per cent of our total customer base,” Malhotra added.

Emerging trend

According to analysts, this is a trend that has a lot of potential and e-commerce companies should milk the opportunity.

“Everything is available on their (e-commerce) portals for the same price in any given location in India. The advantage in buying products in bulk for shops in smaller towns and cities is quick delivery and availability of the product for tier-2 and -3 cities,” Sanchit Vir Gogia, Chief Analyst and CEO, Greyhound Research, said.

However, he also said that it is a given fact that a major chunk of targeted customer base for e-commerce industry is still not equipped to purchase online.

According to a recent joint study done by Assocham and PWC, the Indian e-commerce industry is expected to spend an additional $500-1000 million on infrastructure, logistics and warehousing, leading to a cumulative spend of $950-1900 million till 2017-20.

The e-commerce is expected to reach anywhere $10-20 billion by 2017-20.

Source: The Hindu Business Line

Asia-Pacific, Middle East new focus areas for IT services firms #Press #Media #Mint

Indian software services exporters have begun sharpening their focus on countries like Japan, China, Malaysia, Australia and those in the Middle East, given the growth potential of these markets.

In the June quarter, the top five Indian software services exporters posted an average growth rate of 11-15% in Asia-Pacific and other emerging markets.

Growth from the Asia-Pacific region for India’s largest information technology (IT) services company, Tata Consultancy Services Ltd (TCS), was up 34.9% from a year ago and that from the Middle East rose 20% in the same period. Wipro Ltd, which has been in the Middle East for over a decade, saw its Middle East and India business grow 13.8% in the June quarter from a year earlier.

For Tech Mahindra Ltd, India’s fifth-largest software services exporter, the Middle East is a priority due to government-led information technology initiatives, like the recent eight-year engagement it signed with the Dubai Economic Council to provide solutions to make Dubai a “smart city”. Tech Mahindra also has the contract to provide data solutions to power the FIFA World Cup 2018 in Qatar.

The move to emerging markets is logical, given the high growth potential in these regions, even though it is on a lower base, say experts.

South East Asia’s competitive and rate-sensitive market allows for smaller deals, especially from countries like Taiwan, Hong Kong, Singapore and Malaysia, which are of particular interest to mid-tier firms, said Ravi Menon, IT analyst with Centrum Broking Pvt. Ltd.

Sangeeta Gupta, vice-president of software lobby body Nasscom, said that exploring business in countries like Japan, Korea, Indonesia, China and continental Europe makes sense “as 80% of incremental revenue is projected to come from these markets by 2020”.

Sid Pai, partner at research and consulting firm, Information Services Group (ISG), pointed out that while developed markets like the US and Europe are growing a mere 2-3% annually, markets in continental Europe like France, Germany and the Nordics are largely underpenetrated but have an addressable market opportunity of 30-40% per annum.

“Other emerging markets in Asia-Pacific like Japan, China and India, which currently contribute barely 5% to revenues of IT services players, have a potential to grow by 30-40% per annum as well,” he said.

Sanchit Vir Gogia, chief analyst and chief executive of Greyhound Research, agreed that the Asia-Pacific region “will remain the fastest-growing emerging market, especially Association of Southeast Asian Nations (Asean) and China, which offers a lot of sophistication in terms of varied deals”. However, growth in the Middle East, he said, was restricted to regions like the UAE, Qatar, Oman and Egypt.

According to Cathy Tornbohm, vice-president of research at research firm Gartner Inc, “clients need a range of delivery locations for people-based processes. This is for proximity for ease of visiting sites, cultural fit, languages and time zones”.

For instance, global business process management firm Aegis Ltd, a part of the Essar group, which recently sold its American unit Aegis USA to Paris-based business process outsourcing firm Teleperformance for $610 million, said it would use some of the earnings for acquisitions in Korea and Japan.

The move, according to Sandip Sen, global chief executive of the company, “is to complement its Malaysia business, which will be the hub of its operation in South Asia, after the acquisition of Malaysia-based Symphony BPO in March”.

The Middle East market “offers opportunities of an emerging market as well as an advanced market, which is rapidly deploying world-class technology, comparable to the developed world”, said Kamal K. Singh, founder and chief managing director of Rolta India Ltd, a software engineering firm.

About 12-15% of Rolta’s revenue comes from emerging markets, and “most of the contracts we win here are with government and public-private partnership projects”.

Meanwhile, even the Indian government, said R.S. Sharma, secretary of the Department of Electronics and Information Technology “is seeking to identify new non-English speaking markets, like Africa, Latin America, China and South East Asia as it looks to promote small and medium size enterprises in the segment”.

He added that the government has formed an expert council, which has members from different industry lobbies, to figure out what could be done to extend India’s presence in these markets.

Source: Mint

Infy: Analysts question timing of letter #Press #Media #HinduBusinessLine

Balakrishnan declines to comment; Pai out of the country

With first employees’ nod

The recommendation, which was reportedly meant to reinstate losing investor confidence, was also signed by DN Prahlad, one of the first employees of Infosys.

Rumours of a buyback first surfaced before Infosys announced the appointment of Vishal Sikka, two days before the company’s AGM on June 14.

“We were inundated with calls by media asking us about the buyback. And not surprisingly, the timing of this letter to the board happened on July 29, just one day before the EGM on July 30 where Vishal Sikka’s appointment was formalised,” said an Infosys spokesperson.

She further added that a long-term investor who always attends the company’s AGMs and EGMs, this time around pointedly told the board members during the EGM that they should consider buyback of shares.

While Pai could not be reached as he was out of the country, Balakrishnan said he did not want to comment on why he had made such a recommendation to the board.

Not driven by noble cause

“Why didn’t either Bala or Pai suggest buybacks when they were CFOs of the company, when they could have easily done it. Their motivations today are clearly not driven by the noble cause of adding to shareholder value,” said Sundararaman Vishwanathan, Manager Consulting, Zinnov, an advisory firm for global businesses. Large institutional investors such as UBS, Fidelity and Temasek are certainly not in a hurry to sell out, as they are invested in Infosys for the long term, he elaborated.

A corporate governance advisory firm in which former Infosys CFO Mohandas Pai is an investor said the IT major should not give any special consideration to the letter written by the former finance heads of the company. “I think Infosys should treat the letter written by former CFOs of the company as a request from investors than for the positions they held there,” Sriram Subramanian, Founder and Managing Director of InGovern Research Services said.

Failed to articulate strategy 

Subramanian pointed out that it was unusual for a company which has no debt to sit on such a huge cash pile.

He said one might question the timing of the letter but the fact was that Infosys had failed to articulate a strategy in this regard.

The whole premise of former Infosys CFOs writing a letter to the board asking for a buyback of shares to boost investor confidence is flawed and led by personal motives and emotions, observed Sanchit Vir Gogia, Chief Analyst & CEO, Greyhound Research.

Daljeet S Kohli, Head of Research, IndiaNivesh Securities, feels this is a case of pressure tactics to force Infosys to do something about the cash pile it has been sitting on for the last four years.

“A company would resort to buyback as the last resort only when it has exhausted every other option to grow,” he added.

Source: The Hindu Business Line

HCL Tech bags $250-m deal from Alcatel-Lucent #Press #Media #HinduBusinessLine

HCL Tech has won a $250-million deal from French telecom major Alcatel-Lucent.

The deal involves HCL taking up complete R&D work of Alcatel-Lucent in technologies such as 2G and 3G.

Further, HCL will co-create intellectual property and help the French telecom major innovate in these areas. When contacted, an HCL spokesperson confirmed the development. The deal comes a day after Alcatel-Lucent in its second quarter earnings told analysts that its short-term results would be ‘lumpy’, after its brief comeback to profitability in the preceding quarters that resulted in deal wins from Vodafone and LTE investments in China.

“Alcatel-Lucent is trying to steady its ship and clearly this effort points to significant cost savings and faster time to market,” said Sanchit Vir Gogia, analyst with Greyhound Research.

For HCL, this deal follows a spate of multi-million dollar deals that the company bagged in the 2014 fiscal.

According to Prabhudas Lilladhar IT analyst Shashi Bhusan, HCL signed 14 multi-million dollar, multi-year deals that were estimated to have total contract value of $2 billion. However, most of these deals have been won in the area of IT infrastructure management, which involves taking over of IT assets of global pharmaceutical, financial institutions or telecom companies and running them.

This is the first big ticket deal that the company has won in the area of engineering R&D, which contributed 7.4 per cent to its overall revenues, according to company data.

Source: The Hindu Business Line