Lets forget the media hype. Lets forget the ups the respective stock markets have shown, its still seems like a non-matching combo. Infosys and Cap Gemini does not look like pair. Why it wont be deal, eight reasons:
1. For 2007-08 Infosys has projected a 28-30% revenue growth where for Cap Gemini its mere 8%.
2. Infosys’ operating margin stood at approximately 31% in the end of 2007, Capgemini had a disastrous 5.8%
3. Cap Gemini is too huge, its mammoth in size, Infosys’ turnover is $3.1 billion, Capgemini’s $10.35.
4. Will Infosys be comfortable while compromising its margin embracing 70,000 employees of CapGemini, who again are not much culturally aligned?
5. Infosys, as seems to be, believes in organic growth. The head honchos there do not strongly believe in acquisition for a quick bottom line boost.
6. Yes, Infosys is weak in consulting part, but if you keep ‘consulting’ aside Infosys and Cap Gemini have complementary strengths. Then, you need to ask, why this acquisition is taking place at the first place?
7. Infosys next may look for a smaller consulting unit.
8. Infosys is a debt-free company and this philosophy goes down deep into its mission and vision statements. Though raising a debt for special purposes wont be difficult, is Infosys (Tata-Chorus deal did hurt TCS) ready for a big debt?
More: Infosys' Capgemini Plan: Is it a saga of identity crisis?
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» Infosys' Cap Gemini plan: Is it a saga of identity crisis? from BPOTiger
How much global company Infosys is, I mean perception wise, even in its own country? How urgent is the need to acquire a global brand not only to mash its image up, but also to get equipped to take on... [Read More]
Tracked on: July 2, 2007 8:20 AM | Permalink to Trackback