Infosys CFO M.D. Ranganath
Infosys CFO M.D. Ranganath

Infosys CFO Ranganath resigns, deputy may replace him

Ranganath's departure is the second CFO exit at Infosys in three years after Rajiv Bansal resigned in October 2015

Mumbai: Infosys Chief Financial Officer MD Ranganath, a veteran of nearly two decades at India’s second-largest software services company, has abruptly stepped down from his position, marking the second CFO departure at Infosys in three years.

In a statement to stock exchanges, Infosys did not give a reason for Ranganath’s departure, but said the company’s board had accepted his resignation and Ranganath would continue in his current role till 16 November 2018. The board has already started the process to hunt for Ranganath’s successor, it added.

According to two people aware of the matter, who requested anonymity, Jayesh Sanghrajka, deputy CFO at Infosys, is likely to replace Ranganath as the company’s next finance chief.

Ranganath’s departure marks the third top-level exit — all of them at the executive vice-president level — at Infosys under the stewardship of Chief Executive Officer Salil Parekh, who took over the reins of the company eight months ago. For Parekh, Ranganath’s exit comes at an inconvenient time, given that Infosys is struggling to maintain its previous levels of margins, even as it chases growth.

His exit is bound to raise concerns on stability at the top, and Infosys’ ability to retain its most valuable top leaders, given that Ranganath was widely seen as a steadying influence at the company, especially under the tenure of previous CEO Vishal Sikka when the company went through unprecedented levels of tumult.

Other than Ranganath, Infosys lost two other top leaders this year — former president Rajesh Krishnamurthy and former healthcare business head Sangita Singh.

“Over the last 18 years Ranga has played a pivotal role in the growth and success of Infosys. During his long stint in the company, I have seen him in a wide spectrum of leadership roles and in each of them he has delivered results with distinction. With Ranga as CFO, the company has in the last three crucial years, delivered a strong and resilient financial performance on multiple fronts, implemented an efficient capital allocation policy and earned the respect of all stakeholders through enhanced value creation," Infosys Chiarman Nandan Nilekani said.

Ranganath, popularly known as “Ranga", was widely seen as one of the last executives who represented the old guard of Infosys. He worked at ICICI Bank for nearly eight years, prior to joining Infosys in 2000. Over the years, he enjoyed a warm relationship with the founders and the promoter group at Infosys, especially with founder NR Narayana Murthy. During his tenure, Ranganath took on various roles at the company, including chief risk officer. He also played a key role in the chairman’s office that was set up in June 2013, when Murthy returned to the company as executive chairman.

“I am grateful to Infosys for giving me the opportunity of serving as CFO of this global iconic company. I am proud that over the last three years, during a critical phase of the company, we delivered strong and consistent financial outcomes, maintained high standards of financial reporting, built a world-class finance team, further strengthened the company’s competitive position and enhanced value to the stakeholders," Ranganath said.

“I have worked with Ranga (Mr. M.D, Ranganath, CFO, Infosys) for over 15 years. He is clearly one of the best CFOs in the country. His ability to take tough decisions in challenging situations, his solid financial expertise, strong value system, unfailing courtesy and flawless execution always distinguished him as an exemplary leader and a key asset for the company. He has been instrumental in raising investor confidence in the company during the last five years by managing costs and margins," Narayana Murthy said.

With his exit, Infosys has now lost two CFOs in the space of three years, a worrying development for a company of its size. In October 2015, former CFO Rajiv Bansal resigned, amid tensions with the then management team led by Sikka. Bansal was also at the centre of the controversy surrounding the company’s controversial Panaya acquisition, a deal he had opposed. Subsequently, Bansal was paid a huge, unprecedented amount of severance by the previous board of Infosys under then chairman R. Seshasayee. That episode sparked further controversy and attracted the ire of the founders, especially Murthy.

“Infosys is a very process-driven company and to put it simply, it is the easiest job for a CFO, since the CFO has to only put cash to use and think of a buyback," according to a Mumbai-based equity analyst at a foreign brokerage.

“Things are good if there is nothing sinister like the last time (when Bansal quit). I don’t believe he (Ranganath) not gelling well with CEO Parekh should be much of an issue. In every field, you have this challenge. Kumble could not get along with Kohli in cricket and had to leave. So till the time there is nothing sinister, CFO leaving should not be much of a challenge," according to another analyst at a domestic brokerage firm.