Krithivasan takes charge as TCS CEO

Industry stakeholders and analysts said the move is not expected to cause any instability for the company, owing to multiple factors. Ruchi Mukhija, vice-president at financial services firm Elara Capital, said, “With Krithivasan being an internal person, combined with how we’ve seen TCS handle past leadership changes, we expect very limited upheavals in the company.” She said Krithivasan’s previous role in TCS, in which he served as the president and head of global banking, financial services and insurance (BFSI) business, may further help during a period of global slowdown in IT spending with the BFSI sector being hit the worst.

“In his limited interactions with investors, the impression that we’ve received is that most of the company’s policies and strategic decisions will continue as before. As a result, we don’t expect to see much material strategic changes, and it should be a smooth transition since Gopinathan will also be there until September,” Mukhija said.

Apurva Prasad, vice-president, institutional research at HDFC Securities, concurred, adding, “There have been multiple leadership transitions across most tier I companies in the BFSI vertical. These include TCS, Infosys and Wipro, and even Cognizant pursuing the sector more aggressively. The intensity of deal winning in the market may go up, which happens during these transitions. We saw that with Wipro earlier as well, and we may see TCS also make a thrust for bigger deals going forward.”

The BFSI sector contributes around 30% of the entire Indian IT services industry’s revenue for the six large-cap entities. TCS, which closed FY23 with operating revenue of ₹2.25 trillion, drew ₹86,127 crore, or over 38% of its total revenue from the BFSI sector.

Other companies have seen multiple leadership changes in the sector. At Infosys, ex-company president Mohit Joshi quit on March 11 to replace retiring Tech Mahindra chief, CP Gurnani, at the helm later this year. Joshi was one of two Infosys presidents, and resigned shortly after fellow president, Ravi Kumar S, also left the company to join rival IT services firm Cognizant as its chief executive.

On 8 November, Wipro appointed Frederic Abecassis as its new BFSI business head for the south-east Asian market.

HDFC’s Prasad said that as a result of the move, TCS may sign a larger quantum of large deals, which are typically seen as multi-year client contracts valued at over $1 billion.

“There could be more mega deals at TCS, given the focus on cost optimization and consolidation in the industry — and considering that TCS has historically participated well in such market situations. We expected deal sizes to be strong. At the same time, some supply-side factors implying demand for tech deals in the industry have only improved versus earlier, and that does have a positive impact in the scenario of a leadership transition of this nature,” he said.

TCS shares closed at ₹3,291 apiece on Wednesday, down 0.72%. The BSE IT index rose 0.35% to 29,346.42 points.

Updated: 31 May 2023, 10:15 PM IST