This Article is From Jul 11, 2014

Infosys at 'Cusp of Change', Revival to be Gradual: Analysts

Infosys at 'Cusp of Change', Revival to be Gradual: Analysts
New Delhi:

Standing at the "cusp of change", IT services giant Infosys will now widen its focus on software assets and intellectual property under its new chief executive Vishal Sikka, analysts say.

Mr Sikka, who takes over from the current CEO and managing director S D Shibulal on August 1, brings in his extensive experience in products at enterprise software giant SAP.

"Infosys is at the cusp of change...Infosys is all set to undergo a transformation shift in its DNA - from a pure-play system integrator to a firm with increasing focus on software assets and intellectual property. Vishal has an important role to play," Greyhound Research CEO Sanchit Vir Gogia said.

He further said that the industry is closely watching the next steps Infosys will take under his leadership.

Once a bellwether for the over $118-billion Indian outsourcing industry, the $8-billion Infosys has been lagging behind peers like Tata Consultancy Services (TCS) and HCL Technologies. Added to that were the slew of exits of senior level executives that added tremendous pressure on the management.

(Read: Infosys Exodus Continues Amid Lower Pay Hikes)

Analysts, however, expect the revival to be gradual.

"(There is a) healthy deal pipeline and strong volume growth at the start of the year. Efforts to revive growth are taking place amid significant leadership changes, and hence we expect revival to be gradual," Motilal Oswal Securities IT analyst Ashish Chopra said.

He also said that the leadership change would be a positive signal for investors.

Infosys, which announced its financial results for the April-June 2014 quarter earlier in the day, saw it profits growing 21.6 per cent to Rs 2,886 crore, while revenues were up 13.3 per cent at Rs 12,770 crore. (Read more)

"The company posted better than expected numbers on the Earnings before interest and taxes (EBIT) and net profit front," Angel Broking vice president-research (IT) Sarabjit Kour Nangra said.