Infosys claims received positive reassurance from clients over return of Nandan Nilekani in wake of Vishal Sikka exit

The top management of Infosys claimed that it has received positive reassurance from the client community during its massive outreach initiative in light of dramatic exit of CEO Vishal Sikka and co-founder Nandan Nilekani coming back as chairman last month. “The feedback from our clients has been positive and we have not seen anything unusual. We are now very much focused on execution,” Infosys interim CEO U B Pravin Rao said during the Citi Global Technology Conference 2017 held in New York on Thursday. According to the interim CEO, Nilekani has brought in certain stability in the Board of Infosys.

The resignation of Sikka and appointment of Nilekani had rung in certain uncertainty among the clients on the future direction of Infosys. However, Rao said the current strategy will be continue and there no plans for any massive overhaul except for a few minor changes with the key focus being on execution.

On the overall demand scenario, Infosys interim CEO said it has been mixed bag for them with verticals such as financial services, utilities, manufacturing and engineering services showing certain positive momentum. Rao said there is certain volatility in the retail segment and an ongoing structural adjustments in the telecom sector. In light of the ongoing changes in the overall demand environment, Infosys has also employed a four pronged strategy which include higher usage of software in delivering their services, cultural transformation, building stronger links with the ecosystem and higher localisation of employees whichever geography it has its presence.

On the operating profit margins (OPM), Infosys CFO M D Ranganath said that they are able to maintain the OPM in the 23-25% range using all the cost optimisation levers like utilisation, automation, onsite-offshore mix. However, he added that these cost optimisation measures will not come at the cost of growth.

Infosys will also continue to hire during the current fiscal but it is unlikely to in the same pace as what was witnessed couple of years ago. The net addition in Infosys’ headcount this year was 30% lower than what it was one year ago. Rao said there is no constraints in the volume supply of talent in terms of engineering graduates but the quality pool from this segment is only 20-30%.

Infosys will also actively scout for acquisitions but will only seek for those entities which falls into their strategic fit and helps them differentiate. Rao said they were looking for further acquisitions i the digital space. On the India business, the Infosys interim CEO said that they will continue to very selective on the kind of projects they would bid. He felt there were still pricing challenges and contractual inflexibility in the large number of India IT contracts. The company would be keen on projects which have wider national impact.