The banking, financial services and insurance vertical continues to remain the dominant revenue generator for Infosys, but questions are now arising whether the company is having issues with its BFSI revenue stream following the announcement on flat revenue guidance for Q4 made by the company on Thursday, reports The Economic Times.

In the quarter ended on December, the BFSI vertical grew by 3.4% sequentially and 11% annually. This is slower than the company average growth and can be attributed to some extent to internal weaknesses, say analysts. In the June quarter Cognizant went past Infosys in BFSI sector leaving it in the third position with the current order being TCS, Cognizant and Infosys.

Many wonder if the recent reorganisation has had an impact. Infosys recently divided its business into four large verticals - BFSI, manufacturing, retail and life sciences as well as energy utilities, communications - with one person responsible for each vertical.

The head of the BFSI vertical Ashok Vermuri, during the quarter announcement stated that the BFSI space continues to remain strong and clients are seeking high value services. Some of the large deals won by the company were also in the BFSI space and he was seeing no significant decline in client confidence, he added.

An official from a rival company said that Infosys does not have the cushion of a strong play in the insurance pie of its overall BFSI play. Insurance just contributes about 7% of the company's revenues, while for competitor Cognizant (including health insurance) this is about 27%.

However, with the difficult economic environment and the company's restructuring efforts, there is a large focus on high-end services. When the economic climate does improve in the US, Infosys will be the fastest to bounce back in the BFSI space.

(Source: The Economic Times)