Wish bigger startups have more respect for profit margin: Vishal Sikka

14 Jan, 2016

Lauding the buzzing Indian start-up ecosystem, Infosys chief Vishal Sikka today said these are healthy signs for the economy but "wished" that "bigger startups" have more respect for profit margins.

"Overall the emphasis that is being placed in India on start-ups and on entrepreneur is a good thing. Of course it is true that vast majority of the start-ups fail. However, entrepreneurs never fail," Sikka said in response to a question.

"I think it is a good thing, although frankly I wish that the bigger start-ups have more respect for profit margins, that would be a good thing," he said.

Sikka, however, did not specify any names.

Over the past two years, investors have pumped in billions of dollars into hundreds of startups, many of which have grown into thriving businesses.

However, many analysts believe that growth for some of them, especially in the eCommerce segment, has come at the cost of investor money that has been burnt to acquire customers through deep discounts.

Sikka was speaking to reporters here as he announced Infosys December quarter results. The country's second-largest software firm today reported a 6.6 per cent growth in consolidated net profit at Rs 3,465 crore.

He said the city-based firm is engaged with various ministries and government agencies for initiatives like Startup India, Make in India and Digital India campaigns.

"The start-up movement in India is absolutely a very healthy sign. It is a very positive sign of a growing economy, of innovation, of an innovative youth culture and that's a very good thing," he said.

He added that more can be done to encourage this, both at the government and corporate level.

The government, on January 16, is holding a day-long session on start-ups in which around 2,000 new age ventures, 40 CEOs, and venture capitalists would participate.

Prime Minister is expected to unveil the action plan of the Startup India during this event.

Pointing out that Infosys is investing in start-ups and mentoring them, Sikka said:"One of the things that I m excited about is to help rethink the idea of incubation in a very interesting way... you will hear about that in Make in India week".

He said the company is also working on helping bring scale into some of these start-ups and taking them to its clients so that there can be joint solutions.