Infosys to focus on small buys

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Infosys Technologies , India's No 2 software exporter, is focused on small acquisitions to boost growth and does not expect pricing to improve in the near term, a top executive said. However, pricing will likely remain stable until demand increases, Chief Financial Officer V Balakrishnan said at the Reuters India Investment Summit in Bangalore.

Infosys, which is sitting on a cash pile of nearly USD 3 billion, may look at buying companies in the consulting, back office, healthcare, and utilities segments, Balakrishnan said. "We look at small, niche acquisitions which will help us to penetrate certain geographies much faster, grow certain verticals much faster, grow certain services much faster," Balakrishnan said.

Infosys, which is targeting companies with revenue of about USD 400 million to USD 500 million, may acquire firms in Germany and France to expand its presence in Europe, he said. Balakrishnan also said he is comfortable with margins in the near term, but they could be weighed down by a stronger rupee.

India's nearly USD 60 billion outsourcing sector has taken a hit from the global economic downturn as its core financial clients slammed the brakes on technology spending and demanded sharp price cuts. Nasdaq-listed Infosys has seen pricing drop about 5% over the last six months.

Shares in Infosys, which the market values at nearly USD 30 billion, were up 0.9% at Rs 2,447 on Wednesday in the main Mumbai market, which was up 0.75%.