31 May, 2014

Infosys, the Road Ahead

Infosys has seen some major changes in the past few years since Mr. Narayana Murthy stepped down from the post of Chairman of Infosys Ltd in July 2011. Mr. K.V. Kamath, an able leader and one of the pioneers in bringing ICICI bank back on track, was appointed the Chairman of the company. Mr. S.D. Shibulal took over as the CEO and MD of Infosys Limited on 21st August 2011. Since then, the largest growing IT Company in India lost its track and its growth rate started declining. TCS and HCL showed better growth rate than Infosys. Infosys missed on its projected growth rate continuously for few quarters and thus they became pessimistic. They started forecasting their growth rate much lower than the industry average.

Infosys Founders

Seeing Infosys growth going down, Mr. Narayana Murthy was recalled as the Executive Chairman of Infosys on 1st June 2013. He brought his son along as his executive assistant, which created some problems in the board as many senior members thought that Mr. Rohan Murthy may bypass them in leadership roles in the company. Since the return of Mr. Narayana Murthy Infosys was focusing on cost cutting as well as increasing the number of big projects. The move of bringing back Mr. Murthy worked for Infosys with its share again valued above Rs. 3000 on 28th May 2014 from Rs. 2366 on 29th May 2013. Share of Infosys was Rs. 3000 on July 2011 before Mr. Murthy left Infosys.

Since the return of Mr. Murthy though the company was coming back on track but there were other problems faced in top management. Slowly and gradually many senior management has resigned from Infosys. Every time it seemed that everything is going fine for Infosys, one of the key members of Infosys family would resign. Many key members like V Balakrishnan, Ashok Vemuri, and Stephen Pratt have resigned over the past one year. Recent blow to Infosys growth was resignation of Mr. B.G. Srinivas. He was a President and a Member of Board at Infosys and was one of the probable CEO of the company.

The recent resignation of Mr. Srinivas led to the decline in share rates of Infosys by 7% in just one day. The damage was done which will require quite a time to recover from. The reason of sudden resignation is not known but it is expected that he would join as CEO of some other IT company. There has been no statement by Mr. Srinivas or Mr. Murthy on the sudden resignation of the former. Now the things to watch for Infosys are that whom will they announce as the replacement of Mr. Srinivas and who would be the next CEO of Infosys Ltd when Mr. Shibulal leaves the post in January 2015.

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