Infosys (INFY – Free Report) recently announced that global industrial product manufacturer, CIRCOR International, has chosen it to accelerate the latter’s IT modernization journey. The company said the deal required it to revamp CIRCOR’s IT infrastructure, service desk and user support applications.
As part of the agreement, Infosys will help transform CIRCOR’s IT landscape and modernize its IT infrastructure by deploying SLA-based managed IT services and improving processes. The India-based IT services company will also modernize local data centers and cloud landscapes and bring agility to operations.
Additionally, Infosys will use ServiceNow as an IT service management platform to support CIRCOR’s infrastructure, applications and operations. The IT modernization deal is expected to improve productivity and ensure significant cost savings at CIRCOR.
Infosys is strengthening its digital-transformation capabilities to expand and strengthen its position in a highly competitive environment. It enables its clients in more than 45 countries to create and execute strategies for their digital transformation. Such digital-transformation business efforts will help the company compete with peers like Accenture and Cognizant.
Last month, Infosys partnered with Telenor Norway, a wholly owned telecommunications operator of Telenor, to accelerate the latter’s IT modernization journey in support of the ‘Beyond Connectivity’ programme.
In the same month, Infosys partnered with Bpost (Belgium Post), a postal operator and e-commerce logistics provider headquartered in Brussels, to provide cloud security solutions to identify and ensure rapid response to vulnerabilities -suspect security event.
Back-to-back contract wins drive Infosys’ top line. In fiscal second quarter 2023 results, the company’s revenues rose 13.9% year over year to $4.56 billion.
However, Infosys’ near-term growth prospects are likely to be hurt as organizations postpone their investment plans in large and expensive technology products amid growing concerns of a global slowdown amid current macroeconomic challenges. and geopolitical tensions.
Also, high operating costs associated with hiring employees, and sales and marketing strategies to capture more market share are likely to strain margins in the near term.
These, along with the rapid proliferation of customizable Internet-based software, are hampering Infosys’ traditional outsourcing business. Challenges can weigh on the company’s profitability.
Zacks Rank and Key Picks
Infosys currently carries a Zacks Rank #4 (Sell). Shares of INFY have fallen 29.3% year to date (YTD).
Some better-ranked stocks from the broader Computer & Technology sector are Digi International (DGII – Free Report), Zscaler (ZS – Free Report) and Baidu (BIDU – Free Report) . Digi currently has a Zacks Rank #1 (Strong Buy), while Zscaler and Baidu have a Zacks Rank #2 (Buy). You see the complete list of Zacks #1 Rank stocks today here.
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