Infosys performance below par in the last 2 years: Shibulal
2 min read 11 Jul 2014, 05:13 PM ISTShibulal said the firm needs to regain consistency even as it tries to recapture industry-leading revenue growth
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Bangalore: Outgoing Infosys Ltd chief executive and co-founder S.D. Shibulal on Friday conceded that the Bangalore-based firm’s performance over the past two years has been less than satisfactory and that the former sector bellwether needs to regain consistency even as it tries to recapture industry-leading revenue growth.
For the 2014-15 fiscal year, Infosys has forecast revenue growth that is much lower than average industry expectations, indicating that a turnaround is still very much a work in progress. For this fiscal year, Infosys has forecast revenue growth of 7-9% as compared with the 13-15% growth forecast for software exports by industry lobby Nasscom.
In his last earnings press conference before leaving the company on 31 July, Shibulal also emphasized that despite the challenges that Infosys had faced over the past few years, his successor Vishal Sikka would inherit a robust company that had put most of those challenges behind it.
“We have not been satisfied with our own performance over the last two years," Shibulal said at an unusually subdued press conference. “It is important for us to have sustainable growth and industry-standard growth. If you look at Infosys, our aspiration has always been to deliver superior financial performance."
“So growth remains our top priority, and I’m sure it will remain the top priority for Vishal and (chief operating officer) Pravin (Rao) as well," he added.
Under Shibulal, who took over as CEO in August 2011 from co-founder S. Gopalakrishnan, Infosys experienced the worst period in its history, missing its own revenue forecasts several times, conceding market share to rivals like Tata Consultancy Services Ltd and in the process, giving up its prized crown of the bellwether of India’s $118-billion information technology industry.
In April 2013, the company announced one of its worst quarterly financial results, prompting investors to punish the stock and wipe away more than one-fifth of its market value in a day. The performance ultimately prompted the company to recall founder N.R. Narayana Murthy from retirement to script a turnaround and visualize a viable long-term succession plan for the company.
“Yes, we have gone through a tough time, we have gone through a time which was very challenging. The challenges were not external alone; there were a number of internal challenges as well which were Infosys-specific," Shibulal said.
Shibulal, who is the also the only Infosys founder to have briefly left the left the company to work for a different company (Sun Microsystems Inc.) and then returned to Infosys, also conceded that the company needed to regain its fabled predictability of performance—one of the benchmarks that Narayana Murthy had put in place during his tenure as CEO.
“We are (however) more predictable now than we have been in the recent past," said Shibulal, maintaining that Infosys is in a much stronger position now than it was when he took over the reins of the company.
“The most important thing to remember is that all of these challenges which are Infosys-specific and internal are all behind us," Shibulal said.
Last year, the company reached a $34 million settlement to end a US investigation related to the alleged practice of flying workers to client sites in the US on temporary visas, he noted.
“...we have closed off other cases and won many of them, we have completed the transition to 3.0 we have completed the leadership transition…we have put a very strong foundation in place," said Shibulal.
The reference to 3.0 is an allusion to the company’s strategy of earning more revenue from newer areas of technology such as big data, analytics and cloud computing.
