Infosys eyeing acquisitions in data analytics and SAAS segment, says CEO Salil Parekh; no layoffs expected due to AI

After two acquisitions this year, India’s second-largest IT services company Infosys is looking to acquire more companies and says an acquisition on a scale comparable to its recent tech acquisition is certainly possible.

Infosys CEO Salil Parekh told PTI that the company is interested in acquisitions in areas such as data analytics and SAAS and may consider acquisitions in some markets in Europe and the US.

Asked whether more acquisitions could be made on a scale comparable to the €450 million in-tech deal, Parekh said: “Absolutely, I think that would be the size that we would consider 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 share capital of In Semi Technology Services, an India-based semiconductor design company, for Rs 280 million.

In April, Infosys Germany, a wholly owned subsidiary of the group, entered into a definitive agreement to acquire 100 per cent of the share capital of in-tech Holding, a leading German-based provider of engineering, research and development services, for up to EUR 450 million (approximately Rs 4,045 crore).

Infosys is considering more acquisitions, he said, adding that the company is evaluating several companies. The Infosys CEO, however, said that much depends on strategic synergies, financial costs, cultural fit and integration aspects. It is difficult to put a timeline on the outcome of the ongoing discussions, he added.

According to Grant Thornton Bharat Dealtracker Q2 2024, a total of 501 deals worth $21.4 billion were completed in India. The report stated that Q2 2024 saw the highest quarterly volumes since Q2 2022, while values ​​declined due to the lack of large M&A deals.

Focus on Generation AI

Commenting on the impact of generative AI, the Infosys CEO said that there is a lot of interest in the technology from customers and there is a huge GenAI push at Infosys as well. Parekh believes that the adoption of GenAI will increase over time as enterprises experience the benefits and business outcomes that come with it.

“So we think it will accelerate over time, but we’ll wait and see how it develops. It’s kind of like when we started a few years ago with digital or cloud… those things start in a certain way… and then we see what benefits customers get. If they see the benefits are significant, then we’ll see more and more adoption,” he said.

Earlier this year, Infosys said it was working on 225 Generative AI programs for clients and that more than 250,000 employees had been trained in generative AI. Infosys’ AI and generative AI work is now available to clients through Infosys Topaz.

“We do not see any layoffs at Infosys with these new technologies, and in fact, we continue to increase hiring as the economic environment changes…,” Parekh stressed.

According to the Deloitte Technology Trends 2024 report, published in April this year, GenAI is revolutionizing operations and improving customer experiences in sectors such as healthcare, retail, education and agriculture.

According to a Deloitte report, the Indian GenAI market is projected to register a compound annual growth rate (CAGR) of over 24.4 percent between 2023 and 2030. The report also notes that India is poised to become a global leader in AI innovation, leveraging GenAI to drive inclusive progress and sustainable development.

In response to the $3.9 billion GST demand, Parekh said Infosys has already issued updates and disclosed information to the market (through a filing with BSE) and there are no further updates to share.