Infosys Ltd., the second-biggest exporter of software services in India, has been dealing with some problems over the past year. The company has faced certain difficulties after more than ten senior executives have left the company after its co-founder Mr. Narayana Murthy returned a year ago in an attempt to help the company revive its troubled business.
A person with knowledge of the companys troubles, commented for the Financial Times, saying: “When Mr Murthy came in, people thought they had a reasonable chance of being chief executive and when they realised they didn’t they left. In other cases, he issued a wake-up call on performance and accountability, and some people didn’t like that.”
B.G. Srinivas, who occupied the position of a co-president and controlled the insurance, financial-services and manufacturing divisions, has become the latest member of the top executives who chose to depart from the company. Mr Srinivas did not provide a concrete reason for his decision. According to a statement made by Infosys Ltd, the resignation of Mr. Srinivas will take effect June 10th.
As reported by Bloomberg, JM Financial Institutional Securities said in a note to its customers that Mr Srinivas departure “at this late stage, and an external CEO which appears most likely, may create further uncertainty and churn in the short term. There might be further exits at the top management, which may put at risk, our thesis of turnaround and revenue growth recovery.”
The mass departure of top executives, including Mr. Srinivas escape, is expected to make the task of Mr. Murthy even harder. Moreover, the recent departures increased the pressure on the Infosys board, which is trying to find a worth replacement for S.D. Shibulal, who is supposed to retire from the position of Chief Executive Officer in January 2015.
Over the last few years, Infosys has been affected by the narrowed growth on both the European and the U.S. markets, which led to a loss of market share in comparison to some of the competitors such as Tata Consultancy Services.
Infosys Ltd was 1.83% up to close at 2 993.15 Indian rupees per share on Friday, marking a one-year change of +24.51%. According to the information published on CNN Money, the 57 analysts offering 12-month price forecasts for Infosys Ltd have a median target of 61.30, with a high estimate of 73.56 and a low estimate of 45.78. The median estimate represents a +19.20% increase from the last price of 51.43.
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