Margins to be under pressure for 12-18 months: Infosys

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IT major Infosys has been vocal about its aspirational target for 2020, but chief operating officer, Pravin Rao, while addressing analysts call admitted that in the past the company was reluctant to get aggressive on pricing

Rao said the company is making corrections in its pricing strategy to win more deals. However, he warned margins will be under pressure specifically in larger deals for the first 12-18 months, before improving later.

While analysts say Infosys has been focusing only on its newer businesses, Pravin Rao highlighted that he expects a 13 percent compounded annual growth rate (CAGR) from the current service.

The company's energy vertical has of late been volatile but the company expects it to stabilise not before CY17. The company is seeing  positive outlook in all sectors except energy, insurance and telecom.

While Pravin Rao believes 30 percent margins is doable but the biggest challenge he sees is in the revenue productivity.