Infosys To Offer Engineering Services For Ansaldo Energia

Premium technology services and consulting firm, Infosys (NYSE:INFY) , recently inked an agreement to offer engineering services to Italian power engineering company, Ansaldo Energia.

Ansaldo Energia is a renowned producer of thermoelectric power plants that offers its plant engineering, manufacturing and service-related activities to both public and private sector power plants. Presently, the company is making concerted efforts to boost its heavy duty gas turbine business and believes that Infosys is the ideal partner to assist in this venture. Leveraging Infosys’ technical expertise, Ansaldo Energia expects to improve its power turbine design, in turn, fortifying its product portfolio.

Infosys plans to expand its global service delivery network by building two development centers in Karlovac and Moscow in order to offer engineering services to Ansaldo Energia. These development centers will act as hubs nurturing engineering skills for the turbo machinery, aerospace and automotive space. Apart from this, Infosys will be providing its research and development service delivery expertise for its clients. Apart from this, Infosys will also be providing its research and development service delivery expertise for its client.

This is a win-win deal for both companies. While Ansaldo Energia will gain from Infosys’ technical expertise, the latter will get to tap the human resource pool of Alstom (PA:ALSO). Notably, Ansaldo Energia had earlier acquired the gas turbine assets of Alstom. Moreover, Croatia and Russia supply manpower with impressive engineering skills, providing support services to multiple sectors including energy generation and transportation.

This, in turn, will enable Infosys to perfect its technical know-how and offer it to other clients in the industrial and manufacturing domains. This also reflects the firm’s strategy of strengthening its core competencies by pursuing diligent collaborations and partnerships. The company’s alliance strategy is targeted at merging with leading technology providers, which allows it to take advantage of emerging technologies in a mutually beneficial and cost-competitive manner.

Despite Infosys’ planned growth initiatives, the changing pattern of technology use along with rapid proliferation of customizable Internet-based software has been affecting its traditional outsourcing business. This apart, the company suffers weakness particularly in its sales and other delivery operations, which poses a direct threat to its near-term profitability.

This technology firm’s business is highly prone to currency volatility between the Indian Rupee and the U.S. dollar as the majority of its revenues are derived from the U.S. markets. Also, macroeconomic concerns like slowdown in China and economic uncertainty post Brexit might compel businesses to delay discretionary spending. This might pose as a challenge to this Zacks Rank #4 (Sell) company.

Some better-ranked stocks in the industry include Unisys Corporation (NYSE:UIS) and Acxiom Corporation (NASDAQ:ACXM) and Science Applications International Corporation (NYSE:SAIC) . While Unisys sports a Zacks Rank #1 (Strong Buy), Acxiom Corporation and Science Applications carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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