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Infosys Announces New CEO

Infosys Announces New CEO

Thursday morning, Infosys held a conference call to announce the appointment of Dr. Vishal Sikka as the new CEO of Infosys, effective August 1, 2014. Also included in the announcement was the appointment of Pravin Rao as the new COO, effective June 14, 2014. Mr. S Gopalakrishnan and Mr. Narayana Murthy are expected to step down as the executive vice chairman and executive chairman, respectively, effective June 14, 2014. Both will continue as nonexecutive chairmen until October 10, 2014.

Following their departure, Mr. K.V. Kamath will become the nonexecutive chairman of the Infosys board. Dr. Sikka comes from SAP (SAP-ETR 55.40; Market Perform), where he was a member of the management board and led products and innovations globally. He is well known for leading the creation of HANA, an in-memory database for SAP. From our point of view, the conference call did not reveal much beyond the executive management change announcements.

In addition, the company and Dr. Sikka did not offer any insights into his plans and initiatives to revive the company back to double-digit growth. While we understand that he needs more time to grasp the issues facing the company, we were hoping that he would share some insights into his management style and his preliminary thoughts on which areas need the most attention. Time will tell whether he is able to turn the company around, but by getting an industry veteran who has extensive product development experience (rather than IT services) from outside the company, Infosys is hoping to infuse fresh ideas from an outsider. We maintain our Market Perform rating.

Infosys Announces New CEO