Exit of Infosys president Mohit Joshi who is joining smaller rival Tech Mahindra as its CEO and MD could have an impact on Infosys’ ability to tap large deals in an uncertain macroeconomic environment, said experts.
Infosys COO and president Ravi Kumar S also quit in October and joined Cognizant as its chief executive. This has put two top leaders of Infosys at the helm of two of its large competitors, which experts view as concerning.
Under Joshi, Infosys’ banking financial services and insurance vertical has performed well, reporting 9% CAGR over FY16-22, stated a report from Motilal Oswal.
“We view the resignation as a near-term risk for Infosys, given his (Joshi) responsibility as the head of the largest industry unit. Apart from heading various verticals during his stint, Mohit was also responsible for large deals and transformation initiatives,” said the brokerage in a note on Monday.
“Moreover, this elevates the risk of attrition at the mid to senior level over the next few quarters to both of its competitors,” stated the report adding that this churn will however not adversely impact the long term business opportunity for Infosys.
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During the day, Tech Mahindra stock prices surged 7% to close at Rs 1135 while Infosys shares closed at Rs 1440, down 2%. Infosys did not respond to queries on the risks flagged by analysts at press time.“This is the second big exit for Infosys within 5 months, after Ravi Kumar S (a 20-yr veteran) left the company to become the CEO of Cognizant; such attrition is likely to lead to reorganization of Infosys’s management,” said a report by Emkay Global.
However, given its strong mid-level management, peer Infosys would not see much near-term impact, it added.
Joshi also led the Finacle banking platform business and AI automation portfolio for Infosys. He was also responsible for the company’s internal CIO function and Infosys Knowledge Institute and held executive responsibility for large deals across the company. This exit comes at a time when large deals are critical for the IT service majors due to macro-economic uncertainties in the global technology market.
ICICI Securities said in a note that “Infosys is also subject to a churn at the top management level given two key leaders – Mohit Joshi and Ravi Kumar (joined as CEO of Cognizant) have exited the company in the last three months.”
That said, Infosys has experienced top level churn in the past and and still managed to remain on its growth track, as in the case of former CEO Vishal Sikka’s exit, said analysts.
“Nandan and Salil have a strong layer of emerging young leaders who will quickly fill the void, in my opinion. Infosys leadership style has never been to make radical changes in personnel, and I do not foresee a major exodus of talent as a result,” Phil Fersht, founder of HFS Research had told ET earlier.
On March 11, Tech Mahindra announced the appointment of Mohit Joshi as MD & CEO designate. He will be taking over the role post the retirement of CP Gurnani on Dec 19, 2023. In a career spanning 26 years, Mohit has spent 22 years at Infosys.
“Ravi and Mohit are the only major senior level exits that the company has seen in recent times. Considering that Salil’s tenure will last another four years, there was no further scope for growth of these executives within the organization,” said an analyst who did not wish to be quoted.
“Both of these executives were handling large businesses and that can have some immediate impact. However, most of the transformation demonstrated by Infosys over the past 4-5 years was driven by Salil, hence there is no reason to expect a dramatic change in Infosys’ growth story just because of these exits,” the source added.