Infosys Considering Acquisitions in Data Analytics and SaaS Sectors, Says CEO Salil Parekh; No Layoffs Expected Due to AI
Regarding the impact of generative AI, Infosys CEO Salil Parekh stated that the technology is generating significant interest from clients, and there is substantial mobilization of GenAI within Infosys as well. Parekh believes that GenAI adoption will grow over time as companies start seeing its benefits.
After two acquisitions this year, Infosys, India’s second-largest IT services company, is exploring further acquisitions. Parekh mentioned the company is looking at opportunities in areas such as data analytics and SaaS, and may also consider some regions in Europe and the US. When asked if future acquisitions could match the scale of the recent €450 million in-tech acquisition, 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% of the equity in In Semi Technology Services, an Indian semiconductor design services company, for ₹280 crore. Then, in April, Infosys Germany, a wholly-owned subsidiary, agreed to acquire 100% of in-tech Holding, a German engineering R&D services provider, for up to €450 million (approximately ₹4,045 crore). Infosys is actively assessing other acquisition opportunities but notes that much depends on strategic synergies, financial costs, cultural compatibility, and integration challenges. Parekh emphasized that predicting a timeline for these ongoing discussions is challenging.
According to the Grant Thornton Bharat Dealtracker Q2 2024 report, India saw 501 deals valued at $21.4 billion. The second quarter of 2024 had the highest deal volumes since the second quarter of 2022, though the total value declined due to the absence of major mergers and acquisitions.
Focus on Generative AI
Discussing generative AI, Parekh highlighted the growing client interest and the considerable deployment of GenAI within Infosys. He expects adoption to increase as companies see positive business outcomes. “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.
Infosys is currently engaged in 225 generative AI projects for clients, and over 250,000 employees have been trained in generative AI. Infosys offers its AI and generative AI solutions to 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 noted.
A Deloitte technology trends report from April 2024 stated that GenAI is transforming operations and enhancing customer experiences across industries like healthcare, retail, education, and agriculture. India’s GenAI market is projected to grow at a compound annual growth rate (CAGR) of over 24.4% from 2023 to 2030, with the potential for India to become a global leader in AI innovation.
Regarding the $3.9 billion GST tax demand, Parekh stated that Infosys has provided updates and disclosures to the market via BSE filings and has no further updates to share.
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