Infosys’s target for $20 billion revenue by 2020-21

Posted on:18 Apr 2017 09:47:40
Infosys’s target for $20 billion revenue by 2020-21
18 April 2017 Current Affairs: Infosys Ltd, despite a relatively good performance over the past two years, is battling perceptions of under-performance because of its inability to keep pace with its ambitious target of more than doubling its revenue to $20 billion by March 2021.This target appears to have done more harm than good: analysts continue to rate the company using it as a metric; and people in the know attribute the departure of at least a few senior executives over the past few years to it. Now, an analyst at a foreign brokerage has suggested that the company is better off without the target.Infosys maintains this target is an ambition and the management has no plans to dump it.In April 2015, Infosys first outlined its ambitious target: India’s second largest software firm wanted to become a $20 billion firm with 30% operating margin and to generate $80,000 in revenue from every employee working on a project.In 2016, it tweaked the deadline to 2020-21.Infosys ended financial year 2015 with $8.7 billion in revenue, 25.9% in operating margin and generated $52,300 per employee.Two years later, Infosys managed a compound annual growth rate of 8.25% to increase its revenue to $10.21 billion but operating margin declined by 120 basis points to 24.7% and revenue per employee slipped to $51,400, making many question CEO Vishal Sikka’s strategy.
Infosys Ltd, despite a relatively good performance over the past two years, is battling perceptions of under-performance because of its inability to keep pace with its ambitious target of more than doubling its revenue to $20 billion by March 2021.This target appears to have done more harm than good: analysts continue to rate the company using it as a metric; and people in the know attribute the departure of at least a few senior executives over the past few years to it. Now, an analyst at a foreign brokerage has suggested that the company is better off without the target.Infosys maintains this target is an ambition and the management has no plans to dump it.In April 2015, Infosys first outlined its ambitious target: India’s second largest software firm wanted to become a $20 billion firm with 30% operating margin and to generate $80,000 in revenue from every employee working on a project.In 2016, it tweaked the deadline to 2020-21.Infosys ended financial year 2015 with $8.7 billion in revenue, 25.9% in operating margin and generated $52,300 per employee.Two years later, Infosys managed a compound annual growth rate of 8.25% to increase its revenue to $10.21 billion but operating margin declined by 120 basis points to 24.7% and revenue per employee slipped to $51,400, making many question CEO Vishal Sikka’s strategy.

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