Investors hopes Indian IT services can move past a costly boardroom spat with NEW CEO

FILE PHOTO: A Infosys employee stands at the front desk of its headquarters in Bengaluru, India, April 15, 2016. REUTERS/Abhishek N. Chinnappa/File photo
Vastavam web: Investors on Monday cheered the appointment of Infosys Ltd’s new chief executive, in hopes the Indian IT services firm can move past a costly boardroom spat, though questions remain over how the new boss will navigate strained corporate ties internally.Investors on Monday cheered the appointment of Infosys Ltd’s new chief executive, in hopes the Indian IT services firm can move past a costly boardroom spat, though questions remain over how the new boss will navigate strained corporate ties internally.
But investors remain concerned about how he will deal with potential strains in the relationship with the founders, which cost Infosys billions of dollars in market capitalisation earlier this year.“The incoming CEO will have to maintain a good rapport with the founders and take care of corporate governance,” said R.K. Gupta, managing director at Taurus Asset Management, which owns shares in Infosys. “I believe both the CEO and founders will be cautious in their dealings with one another.”In its most recent quarter, Capgemini’s digital and cloud services grew 23 percent in constant currency terms. Capgemini also reported 6.9 percent revenue growth in North America – a market largely under Parekh’s watch and one which accounts for nearly a third of its revenues.
Infosys, by comparison, saw its North American revenue grow at the pace of just 3.9 percent over that same period.“We believe Infosys’ slowing growth in the past 18 months has more to do with patchy execution rather than strategy,” CLSA analyst Ankur Rudra wrote in a note to clients. “Infosys needed a dyed-in-the-wool execution-focused leader who understands services and can build consensus.”