Stock brokerage firms and analysts expressed concern over the continuing exodus of senior executives from Infosys amid fears of a leadership vacuum in the tech major.
The latest to depart was V Balakrishnan, the former finance chief and one of the main contenders for CEO’s post at the company. He was the eighth senior executive to resign from Infosys since NR Narayana Murthy took charge as executive chairman on June 1.
The company’s scrip fell by 2.35% on the Bombay Stock exchange on Monday to close at Rs. 3,468.65. Even as brokers and IT analysts maintained that the company’s long-term prospects appear bright, there was consensus over the negative impact of these exits on Infosys in the medium term.
Other executives who have quit the company since June include Ashok Vemuri, head of the company’s North America business, Basab Pradhan, global sales head and Stephen Pratt, head of Infy’s utilities business in North America.
Brokerage firm Edelweiss has blamed the race for CEO’s post at Infosys for these exits. “One of the key reasons for the last few exits was the race for the CEO post,” it said in a report. “We believe Murthy and the board face a herculean task of appointing a commonly acceptable CEO ... while keeping the core team intact.”
“What is disappointing is the inability of the organisation to retain core team members,” said Kotak Institutional Equities in a report. “This perhaps indicates that the internal challenges are significantly higher than our initial assessment. We believe that the impact of exits could be felt in the medium term.”
Kotak said that while exits are inevitable, the pace of these are a cause for concern. “The pace of exits is surely more than what we had expected... (and) could impact business momentum,” it said.
Murthy has said it could take three years before Infosys is back on the high growth path.