With Nilekani coming back, Infy set to unveil changes in strategy

Infosys is set to make some strategy changes as it seeks to accelerate growth after the comeback of Nandan Nilekani.

According to sources inside the company who told BusinessLine on condition of anonymity, these changes will be in areas such discounted pricing for outsourcing projects, flexibility in structuring contracts and a fresh relook at some of its new technology areas such as Artificial Intelligence (AI).

“The challenges posed by the recent restructuring events can adversely impact growth,” added another senior executive. “There will be a realistic re-evaluation of these targets and while there may not be major changes, the way it gets implemented will be different,” said an Infosys employee.

The refreshed strategy of the company is expected to be revealed on October 24, when it will announce its second quarter numbers.

While the turmoil inside India’s second largest software exporter seems to have subsided since the arrival of Nilekani, a former CEO himself and came back as non-executive chairman, questions are now popping up regarding the path the company will take, at a time when forces such as rapid shifts in technology and changes in client behaviour is putting added pressure on traditional outsourcing business.

On top of that, Infosys has just put to rest a public spat between the Board and founders, which resulted in the eventual resignation of Vishal Sikka who had articulated $20 billion in revenues by 2020 with $30,000 revenue per employee. “With the new set up, can Infosys deliver industry-leading performance on most parameters,” Girish Pai, head of research, Nirmal Bang wrote in the note.

The changes that Infosys are looking at will be assessed by market watchers in the backdrop of an uninspiring 6.5-8.5 per cent guidance given by the software major for the 2018 fiscal. “It will be tested if it sets off on a slow footing possibly impacted by management churn,” a note put out by brokerage firm Motilal Oswal said.

Infosys is also battling intense competition from its peers — both Indian and multinational-based — who are more willing to renegotiate prices and flexible with their contract structuring, opine industry watchers.

Since he took over, Nilekani and interim CEO Pravin Rao have assured investors that the company will stay its course and continue to execute the strategy laid out, which includes initiatives such as Zero Distance.

Infosys is also in the midst of a buyback offer of 11.30 crore shares at ₹115 per share or 4.92 per cent of the equity, which it announced on August 19.

COMMENT NOW