Yahoo Finance Infosys (INFY) Expands in US Public Sector With New Contract
Infosys’ INFY North-American subsidiary, Infosys Public Services, has received a contract for modernizing the Delaware Department of Labor’s existing systems. Infosys Public Services has been given the task of developing a platform for paid family medical leave program.
Infosys Public Services has also been contracted to improve Delaware’s unemployment insurance tax, benefits and appeals programs. To address the demands, Infosys Public Services will deploy its LaborForce solution.
Infosys Public Services introduced LaborForce in 2022. LaborForce is an unemployment insurance platform-as-a-service solution built on the Salesforce CRM platform. The LaborForce platform provides tax, benefits, appeals and workforce-related solutions.
This solution provides improved customer relationship management, analytics expertise and reduced long-term ownership costs. The LaborForce is one of those solutions that Infosys Public Services uses to expand its market share in the public sector software market.
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Growing Public Sector Software Market Aids Infosys
The public sector software market has significant potential as governments and public service departments worldwide are gradually digitizing their operations. Many government agencies have yet to fully embrace digital transformation, presenting a substantial opportunity for growth and expansion in this sector.
Per a Verified Markets report, the public sector software market is expected to reach a market size of $48.03 billion by 2027, witnessing a CAGR of 11.1%. Industry leaders like Oracle ORCL, Tyler Technologies, Salesforce and SAP SAP are rapidly expanding their footprint in this space. INFY's subsidiary, Infosys Public Services, is also capitalizing on this growing trend.
Infosys Public Services has handled major projects in the past. In 2021, INFY upgraded the South Florida Water Management District's enterprise resource management systems with SAP S/4HANA. In 2023, INFY deployed the Quantum Global Digital Management System for the UN Development Programme. The Global Digital Management system was built on Oracle’s Fusion Cloud Applications suite.
In July 2023, Infosys expanded its global footprint by opening Infosys Public Services Canada, Inc. headquartered in Ottawa. North America has contributed more than 60% of Infosys’ revenues in fiscal 2022, 2023 and 2024. Moreover, INFY’s Others revenues segment, which accounts for Infosys Public Services, constantly increased its contribution to Infosys’ total revenues from 2.8% in 2022 to 3.1% in 2024.
Conclusion
Although Infosys currently occupies a small portion of the global and U.S. public sector’s software market, it has significant potential for expansion. Its subsidiary, Infosys Public Services, benefits from the financial backing of the parent company.
Shares of Infosys have returned 8.2% year to date compared with the Zacks Computers - IT Services Industry’s growth of 8.9%. The company expects its revenues to grow in the band of 1-3% in fiscal 2025. The Zacks Consensus Estimate for INFY’s 2025 revenues is pegged at $18.93 billion, indicating growth of 2% year over year.
Infosys carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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