Infosys’s non-executive Board chairman and co-founder Nandan Nilekani on Tuesday outlined the broad strategy for the company going forward and provided an update on some issues that were taken up when he returned to the company in August this year.
Taking the dais, Nilekani — also known as the architect of India’s biometric identity programme, Aadhaar — took questions on strategy, but divulged little about the internal on goings at the country's second largest software exporter.
The company’s search for a new chief executive, post Vishal Sikka’s exit in August, is making “decent progress”, Nilekani said in a media interaction post the second-quarter results.
He also spoke about the shareholder meetings, the first round of which has been concluded. “This process will continue into this quarter,” and a report will be presented with the third quarter results in January, he said.
Referring to the “turbulence” the company faced during the September quarter, Nilekani praised the management’s efforts to carry out the business effectively.
“It's (Infosys’) refreshed strategy now puts its focus on consultancy and business transformation ahead of its focus on software, recognising that software is only an enabler to implement its transformational solutions for more profitable growth. Marketplace focus is reiterated by continued large global wins including GST - the largest tax project around the globe,” said Sanjoy Sen, Doctoral Research Scholar, Aston Business School, UK.
Also Read: Infosys likely to open lower on Wednesday; top ten takeaway from Q2 results
Speaking of the macro issues facing the IT industry, including customer-led innovation that is disrupting established industries across the world, Nilekani said the strategy of “software plus services is very valid”.
The software plus services model was one envisaged by Sikka for Infosys, which involved the use of technologies such as artificial intelligence and using greater automation in delivering services to clients.
To questions on the similarity between the two approaches, Nilekani said execution was the big differentiator.
On a question about the power centre of Infosys shifting back to Bengaluru from Palo Alto post Sikka’s exit, Nilekani said, “Palo Alto continues to be a very vital part…a listening post of latest developments in Silicon Valley… the challenge is how to take these new technologies to our customers. We have the right team and leadership to take advantage of these new technologies.”
He did not rule out more acquisitions that could help achieve the company’s vision to use more automation.
However, the Board finding “no wrongdoing” in the Panaya acquisition, which was at the heart of the issues founder NR Narayana Murthy raised with ex-CEO Sikka, did come under question from analysts.
“The next few quarters will be extremely critical for the company and will require delicate handling to say the least. The new management has to go out of their way and keep focus on what matters - client outcomes, employee happiness and investor returns," Sanchit Vir Gogia, chief analyst and founder at Greyhound Group said.
"Long term, the dangers of being irrelevant also loom high - the fact is that Vishal was instrumental in bringing through the much needed change in culture and strategy. With his departure, Infosys has to go the extra mile to communicate and convince their stakeholders of their focus on being relevant in the future,”Garg added.
Analysts also flagged the company’s lowering of its full year growth forecast as a concern.
Infosys now expects to grow 5.5-6.5 percent this fiscal year, down from its earlier forecast of 6.5-8.5 percent. The IT industry is expected to grow 7-8 percent this year.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
