Dismal performance of Infosys in the first-quarter

Infosys is no longer leading player in India’s IT sector. Infosys's dismal first-quarter performance proved that this company no longer represents the broader trends in the sector. As IT sector is booming, a strong demand emerges globally for IT outsourcing, it is very disappointing result for this IT giant. Infosys's first-quarter net profit missed expectations.

While Infosys’s biggest competitor and India’s largest IT player TCS is showing consecutive outstanding growth rate, Infosys’ result are very dull. 

While TCS has recovered from its loss and within 2 years till March 2011, they have started showing profit in sales and operations by 10% & 16%, Infosys recorded 8% and 8.1% growth respectively.

While talking to the media a senior official of Infosys told that they are looking forward to a stronger second half compared to the first half.

Strange is that even smaller competitors of Infosys like Cognizant and HCL Tech, have been able to take advantage of the rebound in demand to register better growth, but Infosys strategy fails largely. Therefore it raises some serious questions over the strategies and plans that Infosys depends upon.

The reason management of Infosys gives that the performance was hit badly due to wage hikes. But India’s second largest IT Company used to show path to others how to curb the wage hikes and still register significant profitable growth. This time around it was severely missing.