Hexaware appoints R. Srikrishna as new CEO
Srikrishna will replace PR Chandrasekar who has been with Hexaware since 2008
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Srikrishna, who earlier headed the infrastructure services and healthcare division of software services exporter HCL Technologies Ltd, said his focus at Hexaware would be to “create an organization that will deliver new-world services to customers in the digital era, make it an organization people love working for, and both of these objectives will help in achieving sustainable growth”.
Srikrishna replaces P.R. Chandrasekar, who decided to quit as chief executive to “pursue other interests”; the latter will continue as the company’s vice-chairman.
Chandrasekar, who joined Hexaware in 2008 as chief executive from Wipro Ltd, sold his entire stake of 2.96 million shares in Hexaware for Rs.37 crore last September.
On 23 August, Singapore-based Baring Private Equity Asia had announced its decision to buy a 70% stake in Hexaware, including the stake of Hexaware’s founder-chairman Atul Nishar and that of private equity firm General Atlantic, for Rs.1,687 crore.
Hexaware is banking on the fact that Srikrishna helped build the infrastructure services business of HCL Technologies into a $1.3 billion business in his 16 years at the company.
Commenting on the appointment, Atul Nishar, chairman of Hexaware Technologies, said, “R. Srikrishna’s (popularly known as Keech) track record of identifying business opportunities ahead of competition, his ability to engage clients and build an organization capable of sustained growth, make him uniquely qualified to lead Hexaware.”
Analysts, though, say a turnaround will take a while.
“Small firms realize they need to specialize in one practice, so this may have been the reason for getting Srikrishna on board, who has successfully grown the fastest-growing verticals: IMS (infrastructure management services) and healthcare at HCL Technologies,” said Ravi Menon, an analyst with Centrum Broking Ltd. “Chandrasekar’s focus on application management software, PeopleSoft and bets the company put on other services did not turn out well, resulting in Hexaware lagging its peers like Mindtree Ltd in most verticals.”
In the June quarter, Hexaware said net profit fell 22% to Rs.76.6 crore from Rs.97.9 crore in the year-ago period, chiefly on account of visa costs and hiring of marketing consultants. Revenue, however, rose 14% to Rs.610 crore, beating analyst expectations.
“Despite a few quarters of softness, the question is to invest in the right services for sustainable long-term growth, which is Baring’s long-term goal as an investor as well,” said Srikrishna.
He added that building on strong talent within the company and customer loyalty, Hexaware will now focus on digital services where there is a lot of scope, and where Hexaware has a leg-up in certain areas like data management.
The firm will also look at strategic acquisitions and investments in the next 60-90 days in new verticals like healthcare and life sciences, while deepening investments in manufacturing and services like infrastructure management services and business process outsourcing, and increasing focus in specific locations like Europe, and in selective new emerging locations, said Srikrishna.
Talking about the shift from occupying a leadership position in the top-tier firm to heading a mid-tier firm, Srikrishna said, “I’m very excited for the opportunity to create a large organization once again, having joined HCL Technologies when it was very small and was part of the team responsible for growing it to a large-tier company. I am looking to repeat the same formula with Hexaware, and change current perception of the company. I am looking forward to a long stint in the company.”
However, Menon pointed out that Hexaware has been struggling with client issues since 2012–the year it revised its guidance downwards. He added that it will take Srikrishna “at least 12-18 months to turnaround Hexaware and build a successful practice from scratch”.
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