Parekh sets 3-year target to stabilise, turn around Infy
In his first formal address to investors as CEO of Infosys Ltd, Salil S Parekh pledged to stabilise and turn around the fortunes of India’s second largest information technology services company in three years.
On Monday, Parekh presented a three-year roadmap to restore Infosys’s former position as the bellwether of India’s $167 billion IT industry, promising to make the company “more relevant” to its top customers, who farm out hundreds of millions of dollars of business to it every year. In recent years, Infosys has ceded the bellwether tag to rivals such as Tata Consultancy Services Ltd and US-based Cognizant Technology Solutions, which have consistently outpaced the Bengaluru-based firm in terms of new business generated per year.
“Internally, we’ve set a threeyear roadmap where we want to do all these changes in a step-bystep way. The first year in fiscal 2019 will be to stabilize where we are. The second year, we will start to build momentum. And the third year, to start to accelerate where we can have more and more share of our clients’ relevance. And that will translate overall to a better Infosys,” Parekh told a gathering of analysts and investors in Mumbai.
Parekh and his senior management declined to clarify whether the three-year journey implied that Infosys will only start posting industry-matching growth from the third year. Analysts present on the call interpreted it as an admission that the company needs to stabilize first for the next two years.
“Over the last 12-24 months, there has been a lot of change… For this reason, we have said FY19 will be year of stabilization, and all the investments we have spoken about, we expect to see momentum on this from FY20,” Parekh told analysts.
According to analysts tracking Infosys, Parekh’s three-year plan for Infosys sounds similar to the one that co-founder N.R. Narayana Murthy highlighted in 2013, shortly after the board of Infosys asked him to return to the company and restore its former glory.
Murthy returned to the former sector bellwether after it posted several quarters of poor numbers, missed its own revenue and profit forecasts and then ultimately stopped issuing quarterly revenue forecasts.