Mumbai: The outsourcing unit of Infosys Technologies has only a minimal exposure to the US subprime mortgage sector and the troubles do not affect the company's guidance, an official said on Friday.
Demand for outsourcing had so far remained robust, and any economic slowdown could actually increase demand for outsourcing because of the pressure to cut costs, Ritesh Idnani, vice president of Infosys BPO, the software-service exporter's business process outsourcing arm, told Reuters.
"Our exposure to the (subprime) sector is minimal," Idnani said.
"We work with companies which are very broad-based. We work with banks for whom mortgage is just one part of their product portfolio."
"Because of that the exposure is really minimal, and it does not affect the guidance we have already provided," said New Jersey-based Idnani, who heads worldwide sales and marketing for Infosys BPO.
US-based Capital One Financial Corp this week said it would close its Greenpoint Mortgage unit, but said the unit would continue to meet contractual obligation to customers.
"What we do with Greenpoint is minimally impacted. On the servicing side we continue to work with Greenpoint, even post the announcement," said Idnani.
He said US demand for outsourcing remained robust, and said that any economic slowdown that did eventuate could increase demand.
"If things are not necessarily going very well in any particular economy, it would put pressure on the companies to manage their cost structure ... it would in fact fuel the demand for outsourcing."
Infosys BPO accounted for 5.2 percent of Infosys group revenue in the fiscal year that ended on March 31.
It earns 59 percent of its revenue from the United States and 40 percent from Europe. Banking, financial services and insurance accounts for 27 to 28 percent of the BPO unit's revenue, while telecoms and manufacturing have respective shares of 37 percent and 24 percent.
In July, Infosys signed a $250 million outsourcing contract with Royal Philips Electronics and bought three of the Dutch firm's back-office centres to build its European presence, and Idnani say he was constantly looking at term sheets and evaulating other deals.
"We are continuously looking at acquistions, but they have to fit the criteria we look for to fulfil the need for going ahead and acquiring. The Philips deal fulfiled that need and therefore we went ahead and did it," he said.
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