Infosys (INFY) unveils proximity center in Sweden’s Gothenburg – December 6, 2022
Infosys (INF – Free Report) recently announced the launch of a proximity center in the city of Gothenburg with the aim of accelerating digital transformation among the company’s customers in the Nordics.
The newly opened center aims to provide next-generation digital technologies and skills to clients from Gothenburg, helping them navigate to the next level in their digitization journeys. Customers from the Swedish metropolis will utilize solutions in digital manufacturing, connected products and online customer experiences combined with technologies such as cloud, Internet of Things, software technology and artificial intelligence from Infosys.
The center will give Infosys the opportunity to not only expand its opportunities within the local industries in Gothenburg, but also increase its reach to the Swedish market and customers. Thus, this investment will strengthen Infosys’ localization strategy in the Nordic region.
Infosys has enhanced its digital transformation capabilities to expand and consolidate its position in the highly competitive environment. It enables its customers in more than 45 countries to create and implement strategies for their digital transformation. Such efforts in the digital transformation industry will help the company compete with peers like Accenture and Cognizant.
In November, INFY’s wholly-owned subsidiary, Infosys BPM, unveiled the Center of AI and Automation at the company’s Business Experience Lounge in Poland, in collaboration with International Business Machines (IBM – Free report) , to improve the digital capabilities of global enterprise customers in AI and hybrid cloud spaces.
The center enables both Infosys and IBM clients to analyze workflows, design AI-infused apps using low-code tools, assign tasks to bots and track performance on the go. Infosys BPM’s Center of AI and Automation, which highlights a two-year agreement with IBM, is being launched to celebrate the subsidiary’s 15th anniversary.
In September, Infosys partnered with Bpost (Belgium Post), a postal operator and e-commerce logistics provider headquartered in Brussels, to provide cloud security solutions that identify and ensure rapid responses to suspicious security incidents.
In the same month, Infosys partnered with Spirit AeroSystems, Inc., one of the world’s largest manufacturers of aerostructures for commercial aircraft, defense platforms, and business/regional jets. Under the five-year agreement, the IT company intends to offer complete aerostructure and systems engineering services for product development of commercial, business jet and new aircraft programs.
Back-to-back contract wins drive Infosys’ top-line performance. In its most recently reported financial results for the second quarter of 2023, the company’s revenue increased 13.9% year-over-year to $4.56 billion.
Infosys’ near-term growth prospects are likely to be hurt as organizations postpone their plans to invest in large and expensive technology products due to growing global slowdown concerns amid persistent macroeconomic headwinds and geopolitical tensions. In addition, increased operating costs related to hiring new employees and sales and marketing strategies to capture more market share are likely to weigh on margins in the short term.
These, along with the rapid proliferation of customizable Internet-based software, have hampered Infosys’ traditional outsourcing business. These challenges can weigh on the company’s profitability going forward.
INFY’s shares are down 11.2%, while IBM’s are up 23% over the past year.
Zacks Rank and Stocks to Consider
Infosys currently carries a Zacks Rank #4 (Sell) while IBM carries a Zacks Rank #3 (Hold).
Some better rated stocks from the broader Computer and technology the sector is Celestica (CLS – Free report) and Fabrinett (U.N – Free report). While Celestica boasts a Zacks Rank #1 (Strong Buy), Fabrinet has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Celestica’s Q4 2022 earnings has increased by 9 cents to 53 cents per share over the last 60 days. For 2022, earnings estimates have increased 16 cents to $1.86 per share over the past 60 days.
CLS earnings beat the Zacks Consensus Estimate in all of the previous four quarters, the average surprise being 11.8%. The company’s shares have increased by 1.6 percent in the past year.
The Zacks Consensus Estimate for Fabrinet’s Q2 2023 earnings has been revised north 16 cents to $1.89 per share over the last 30 days. For fiscal 2023 earnings estimates have improved by 7.6% to $7.48 per share over the past 30 days.
UN’s earnings beat the Zacks Consensus Estimate in three of the previous four quarters, missing once, the average surprise being 5.4%. Shares in the company have increased by 12.6% in the past year.