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Infosys Ties Up With GEFCO to Aid Digital Transformation

Zacks Equity Research

Infosys INFY is selected by GEFCO, an automotive transport and logistics provider, as an IT partner to boost the latter’s digital transformation efforts over the next five years.

Infosys will help transforming GEFCO’s next-generation business application management services. The company will also leverage its Live Enterprise Suite to aid the group to evolve into a Digital Native organization.

Per Infosys, “This will enable new supply chain capabilities to extract and process information in real-time and generate purposeful insights with very low latency to help GEFCO respond intelligently and effectively across the value chain,”

Digital Transformation: A Positive

Infosys has been making diligent attempts to strengthen its digital transformation capacities for cementing its position on the highly competitive landscape.

The company is assisting its clients in more than 45 countries to create and execute strategies for their respective digital conversion processes. CEO Salil Parikh has also been focusing more on investments in digital technologies ever since he assumed office.

The company recently inaugurated a new digital innovation center in Dusseldorf, Germany. The center lets Infosys work more closely with its clients in the region to support their digital transformation journey while focusing on next-generation business suites, such as SAP HANA, cloud-based services, IoT, 5G, AI and machine learning.

A large number of deal wins and rapidly-growing digital services are constant key catalysts for the company. Strong demand for its services in the cloud, IoT, cyber security, data and analytics is also a major driver. Higher investments by clients in digital transformation, AI and automation are an upside as well.

Notably, Infosys reported strong third-quarter fiscal 2020 results, driven by digital business, which accounted for 40% of its total revenue base. Digital revenues crossed $5 billion annual run rate.

IDC expects spending on technologies and services that enables digital transformation of business practices, products and organizations to reach $2.3 trillion in 2023, reflecting a CAGR of 17.1% over the 2019-2023 forecast period.

We therefore believe that the company’s initiatives to this end will favor its top line going forward.

Infosys Limited Revenue (TTM)

Infosys Limited Revenue (TTM)

Infosys Limited revenue-ttm | Infosys Limited Quote

Zacks Rank and Stocks to Consider

Currently, Infosys has a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader technology sector are Perficient PRFT, Synopsys, Inc. SNPS and ManTech International Corporation MANT, each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Perficient, Synopsys and ManTech is currently pegged at 11.75%, 12.56% and 8%, respectively.

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