Infosys to focus on small buys

By Neha Singh and A.Ananthalakshmi

BANGALORE (Reuters) - Infosys Technologies Ltd, 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.

Shares of Infosys rose about 1 percent to an all-time high of 2,457.90 rupees in intraday trade. The stock ended up 0.33 percent in the main Mumbai market that rose 0.40 percent.

Infosys, which is sitting on a cash pile of nearly $3 billion, may look at buying companies in the consulting, back office, healthcare and utilities segments, Balakrishnan said.

So far, India's IT sector has shied from blockbuster deals and instead focused on acquiring smaller IT divisions to tap opportunities in areas such as utilities and healthcare.

"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 $400 million to $500 million, may acquire firms in Germany and France to expand its presence in Europe, he said.

Anurag Purohit from Religare Capital Markets said: "They can't change their basic acquisition philosophy in a year. But they might look at acquisitions more actively than they did earlier."