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Infosys to Support Proximus' IT Transformation with Excite

Zacks Equity Research

Infosys Limited INFY recently announced that Belgium’s largest telecommunications company, Proximus has selected the company to implement Excite. Infosys’ business transformation program, Excite, will strengthen Proximus’ IT capabilities by replacing legacy IT systems, streamlining processes as well as implementing advanced administrative tools.

Per the program, Infosys will be granted the joint overall responsibility and ownership of the Greenfield Excite program. This includes simplification and remodeling of the company’s product portfolio, digitization of business transactions as well as realignment of business processes and organization around it. The program will consolidate over 40 legacy IT systems into six new robust platforms that will enable superior product lifecycle management.

Excite’s agile IT methodologies including Behaviour Driven Development, Test Driven Development and Pair Programming will improve responsiveness as well as simplify customer-oriented processes. Moreover, remodeling of the Enterprise Business Unit portfolio will aid Proximus to improve design, delivery and servicing across the product catalogue.

Our Take

In the past few quarters, Infosys has collaborated with many biggies for fortifying portfolio and market share. To boost digital, cloud, legacy modernization and automation business, Infosys strengthened strategic partnership with many leading companies. Going forward, the company also has plans to work on areas, including utilization and cost optimization, to boost operational efficiency.

Further, the company has been strengthening core competencies by pursuing strategic collaborations and acquisitions. Notably, the Zacks Rank #2 (Buy) company’s stock has appreciated 11.3% in the past three months, outperforming the industry’s growth of 9.6%.

The company’s services and software are proving conducive to top-line growth. New services, in the cloud first and artificial intelligence first digital experience service area contributed to 9.4% of revenues during the reported quarter. Software services comprising of Edge, Panaya and Skava resulted in 1.6% of revenue growth during the quarter. Strong demand for these relatively new services is helping the company to achieve higher growth as well as margin expansion. Further, cyber security has emerged as one of the company’s prominent profit churners in recent times.

Moreover, its Renew New strategy has helped reap multiple benefits, including renewal of traditional services, winning deals, introduction of services, monetization from key initiatives such as Zero Distance and improvement of employee engagement. This apart, the company’s continued focus on commitment to execution has helped it deliver constant currency revenue growth, margin improvement, record cash generation and high revenue per worker over past several quarters.

Other Stocks to Consider

Some other top-ranked stocks from the same space include DXC Technology Company DXC, Nutanix Inc. NTNX and Arista Networks, Inc. ANET. While DXC Technology sports a Zacks Rank #1 (Strong Buy), Nutanix and Arista Networks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

DXC Technology has outpaced estimates in the preceding four quarters, with an average earnings surprise of 25.4%.

Nutanix has surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 18.5%.

Arista Networks has surpassed estimates in the preceding four quarters, with an average positive earnings surprise of 27.5%.

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