<ul><li><keyword id="6357150" type="General" weightage="100" keywordseo="tcs" source="Orion">TCS</keyword> announced the surprise exit of CEO <keyword id="1422411" type="General" weightage="50" keywordseo="rajesh-gopinathan" source="Orion">Rajesh Gopinathan</keyword> on March 16, stating that <keyword id="16820734" type="General" weightage="50" keywordseo="krithi-krithivasan" source="Orion">Krithi Krithivasan</keyword> would be taking over. </li><li>Despite the unexpected exit, brokerages are optimistic about <keyword id="16817833" type="General" weightage="80" keywordseo="krithivasan" source="Orion">Krithivasan</keyword>’s leadership as there would be ‘nil disruption’. </li><li>Analysts at Nuvama Institutional Equities are of the view that the correction in shares of TCS over <keyword id="221979" type="General" weightage="80" keywordseo="gopinathan" source="Orion">Gopinathan</keyword>’s exit offers an investment opportunity. </li></ul>All eyes are on<a href="https://www.businessinsider.in/business/corporates/news/k-krithivasan-an-iit-kanpur-graduate-appointed-as-tcs-ceo-designate/slidelist/98725089.cms"> TCS’ CEO designate Krithi Krithivasan</a> who is<a href="https://www.businessinsider.in/business/corporates/news/tcs-is-an-integral-part-of-who-i-am-ill-be-a-part-of-tcs-too-as-it-soars-rajesh-gopinathan/articleshow/98722638.cms"> taking over the reins</a> of India’s largest IT services company from Rajesh Gopinathan. His exit came as a surprise as his term was extended for five years only last year. Yet, brokerages expect a smooth transition as the new CEO is an insider, and has worked with the company for 34 years. Prior to his appointment as CEO, Krithivasan headed the banking, financial services and insurance (BFSI) segment, which is TCS’ largest. According to the company’s<a href="https://www.businessinsider.in/business/corporates/news/overall-demand-scenario-not-changed-significantly-but-europe-is-a-problem-says-tcs-ceo/articleshow/96859049.cms"> December quarter results</a>, the BFSI segment contributed to 38% of TCS’ revenue, at ₹22,145 crore. Krithivasan’s appointment received a thumbs up from brokerages given his role in heading the BFSI segment. “BFSI is the largest segment within TCS, contributing over 30% of revenue in Q3 FY23, which makes Krithivasan the natural/perfect choice for the role,” said a report by Nuvama Institutional Equities. <cmsannotation type="cmsannotation" annotationid="‘Nil disruption from management transition’" comment="subhead" text="‘Nil disruption from management transition’">‘Nil disruption from management transition’</cmsannotation> Brokerages maintained an optimistic outlook on Gopinathan’s exit, largely due to Krithivasan’s experience in heading the company’s largest business segment, and his experience in leading the BFSI segment. Krithivasan is only the fifth CEO of TCS, which was founded 55 years ago and has over 6 lakh employees on its payroll. Both Krithivasan and Gopinathan are old hands at the company, and have risen through the ranks. “TCS is a well-oiled machine, and has a long history of seamless transitions at all management levels. Most of its leadership positions have been held by TCS veterans, who have risen through the ranks. We see nil disruption from this management transition,” the Nuvama report added. Analysts at ICICI Securities echoed similar sentiments, given Krithivasan’s experience with TCS in various roles, and the availability of Gopinathan over the next six months to support him settle into his new role. “This appointment is in line with TCS’ strategy of succession planning well in advance and grooming internal employees to take on leadership positions,” the ICICI Securities report added. Overall, most brokerages sounded confident about Krithivasan’s credentials and ability to lead India’s largest IT services company. Analysts at Motilal Oswal even expressed confidence that due to his experience in leading the BFSI segment, Krithivasan wouldn’t face questions that Gopinathan had to – when he took over as the CEO in 2017. “Notably, given his leadership of the unified BFSI vertical since 2017, he is unlikely to face external questions on client relationships that Gopinathan faced as CFO of TCS in 2017,” said a report by Motilal Oswal. <cmsannotation type="cmsannotation" annotationid="Treat price correction as opportunity to invest, say analysts" comment="subhead" text="Treat price correction as opportunity to invest, say analysts">Treat price correction as opportunity to invest, say analysts</cmsannotation> The sudden exit of Gopinathan combined with the negative sentiments in equity markets around the world have put downward pressure on the TCS stock. TCS’ shares were down over 2% mid-way through the trading session on Monday, to ₹3,100. According to the analysts at Centrum Broking, Gopinathan’s exit could be considered as a negative in the short-term. “Rajesh Gopinathan was re-appointed as CEO last year and therefore his resignation is a surprise and likely to be perceived negatively,” the Centrum Broking report noted. Analysts at Nuvama underlined that investors should consider any correction in TCS’ share price as an opportunity to buy into the stock. “Any drop in the stock price must be used as an opportunity to add as valuation is no longer expensive, which makes risk-reward profile attractive,” the Nuvama report said. TCS’ shares have corrected by 10.8% in the last one month. However, improvements in deal pipeline and margins has analysts bullish on the stock, who expect an upside in the range of 16% to 32% over the current market price. <table style="border-width: initial; border-style: none;"><colgroup></colgroup><col /><col /><col /><col /><tbody><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Brokerage </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Recommendation </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Target price </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Upside </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Centrum Broking </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Add </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹3,607 </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">16% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ICICI Direct Research </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Buy </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹3,780 </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">22% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Motilal Oswal </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Buy </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹3,810 </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">23% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ICICI Securities </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Buy </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹3,834 </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">24% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nuvama Insitutional Equities </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Buy </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹4,100 </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">32% </td></tr></tbody></table> Note: Upside compared to current market price of ₹3,100 as on March 20, 2023 SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/hdfc-hdfc-bank-merger-gets-nclt-clearance/articleshow/98735804.cms">HDFC-HDFC Bank merger gets NCLT clearance</a> <a href="https://www.businessinsider.in/stock-market/news/reliance-shares-down-22-from-all-time-high-attractive-entry-opportunity-says-jp-morgan/articleshow/98725589.cms">Reliance shares down 22% from all-time high: Attractive entry opportunity, says JP Morgan</a> <a href="https://www.businessinsider.in/business/corporates/news/tcs-is-an-integral-part-of-who-i-am-ill-be-a-part-of-tcs-too-as-it-soars-rajesh-gopinathan/articleshow/98722638.cms">TCS is an integral part of who I am, I’ll be a part of TCS too as it soars: Rajesh Gopinathan</a>

New CEO of TCS  Krithivasan gets a thumbs up from analysts who are betting on his experience & leadership skills

<ul><li>It’s a day of mixed feelings for me said <keyword id="1422411" type="General" weightage="20" keywordseo="Rajesh-Gopinathan" source="Orion">Rajesh Gopinathan</keyword> who resigned as the CEO and MD of <keyword id="6357150" type="General" weightage="100" keywordseo="tcs" source="Orion">TCS</keyword>. </li><li>We have built something of lasting value that we believe in, he added. </li><li>The 52-year-old remained tight-lipped about his next move but said he has ‘ideas’ which he will start ‘crystallizing’. </li><li>We don’t expect any dramatic change, assured <keyword id="16820734" type="General" weightage="20" keywordseo="Krithi-Krithivasan" source="Orion">Krithi Krithivasan</keyword> who has been appointed as the CEO designate. </li></ul>Rajesh <keyword id="221979" type="General" weightage="80" keywordseo="gopinathan" source="Orion">Gopinathan</keyword> resigned as the CEO and MD of TCS after six years at the top of India’s largest IT services company, on Thursday. “It’s a day of mixed feelings for me. It has been a fantastic journey with TCS. TCS is an integral part of who I am. I never had second thoughts and wouldn’t have done anything differently even if I could ,” said Gopinathan in an address to the media, on Friday. He also shared that he never wrote his resume in my life, and refused to identify his achievements and failures of his term. “I will also be an integral part of TCS – irrespective of all the great heights that TCS will go to and will continue to soar. That is my biggest pride and happiness. We have built something of lasting value that we believe in. That is my greatest takeaway from TCS,” he added. The 52-year-old said that he has some ‘ideas’ and will start ‘crystallizing them’, as he remained tight-lipped about his next move. He did share that he will enjoy the down time with his family. “The last 48 hours have been completely liberating. I’m in a very different space and very, very happy. I’m looking forward to actually doing that reset,” he added. This was after he “relentlessly” took over the task of presenting quarterly results and growth for the last ten years. Prior to becoming TCS’ CEO in 2017, Gopinathan served as the company’s CFO from 2013 to 2017. He was reappointed as the CEO in 2022 for a term of five years. His resignation as the <keyword id="6470796" type="General" weightage="20" keywordseo="TCS-CEO" source="Orion">TCS CEO</keyword> and MD will be effective from September 15, 2023. <cmsannotation type="cmsannotation" annotationid="‘No better time than this to quit’" comment="subhead" text="‘No better time than this to quit’">‘No better time than this to quit’</cmsannotation> Krithi <keyword id="16817833" type="General" weightage="80" keywordseo="krithivasan" source="Orion">Krithivasan</keyword> has been appointed as the CEO designate– who was the global head of the banking, financial services and insurance (BFSI) business. In response to questions over the timing of his decision, Gopinath said, “This is the most stable time we have seen in recent years. There is no better time than this (to quit) and a good time before the financial year-end so that Krithi (Krithivasan) can play for a full year.” Gopinathan added that they crossed big milestones of $7 billion, with an annual revenue run rate close to $28 billion. “We have brought the volatility of the pandemic to a fair state. We have registered very strong growth, first bouncing off the pandemic close to 15% and then over the last nine months, we have grown close to 14.8%,” he added. <cmsannotation type="cmsannotation" annotationid="‘We don’t expect any dramatic change’" comment="subhead" text="‘We don’t expect any dramatic change’">‘We don’t expect any dramatic change’</cmsannotation> Krithivasan is a TCS veteran and has been with the company for nearly 35 years. He said the change in guard will not result in any big change, and will focus on the company’s core principles. “As I mentioned before we have a core set of beliefs and values – focusing on employees, focusing on our customers is the most important engine that drives our growth,” Krithivasan added. As far as the path forward for the BFSI vertical that Krithivasan led, the new CEO designate said, “We will discuss with the team. We will discuss with Rajesh (Gopinathan) and Chandra. You will get to hear sooner than later. TCS as an organisation has been built on a continuous evolutionary approach.” Krithivasan added that there are several leaders in sight to lead the BFSI vertical. “We don’t expect any dramatic change in terms of how we are going to re-organise,” he added. But Krithivasan will move to Mumbai from Chennai, something that he has promised Gopinathan, the leaders shared in the media call. SEE ALSO: <a href="https://www.businessinsider.in/business/corporates/news/tcs-ceo-rajesh-gopinathan-resigns-to-pursue-other-interests/articleshow/98707517.cms">TCS CEO Rajesh Gopinathan resigns to pursue other interests</a> <a href="https://www.businessinsider.in/finance/banks/news/time-to-move-on-from-ceo-extension-debate-for-indusind-bank-and-focus-on-the-fundamentals/articleshow/98693999.cms">Time to move on from CEO extension debate for IndusInd Bank and focus on the fundamentals</a> <a href="https://www.businessinsider.in/stock-market/news/about-7-in-10-investors-unable-to-generate-even-benchmark-index-returns-says-samco-nielsen-survey/articleshow/98695748.cms">About 7 in 10 investors unable to generate even benchmark index returns, says Samco-Nielsen survey</a>

TCS is an integral part of who I am, I’ll be a part of TCS too as it soars: Rajesh Gopinathan

TCS’ achievements under the stewardship of outgoing CEO Rajesh Gopinathan

<keyword id="6696712" type="General" weightage="20" keywordseo="K-Krithivasan" source="Orion">K Krithivasan</keyword>, chief executive officer-designate of the country's largest software services major <keyword id="6357150" type="General" weightage="20" keywordseo="tcs" source="Orion">TCS</keyword>, on Friday said the company doesn't have a culture of making radical strategic changes when it gets a new chief and sounded sanguine about doubling down on customer deliveries. The USD 25-billion software giant in a surprise announcement on Thursday said Rajesh Gopinathan, its CEO for more than six years with over four years left to his second five-year term, has decided to move on from September 15. The IT major also said that Krithivasan, president of its BSFI vertical which contributes 31.5 per cent of its top-line, will head the company as the CEO-designate with immediate effect. Gopinathan, 52, said this is his first resignation and he has not written a resume since the campus days as he joined Tata Industries 27 years ago from the campus and TCS 22 years ago. He did not reveal his plans after September 15. The sudden departure of Gopinathan did not make much of an impact on the TCS counter. On the BSE, the scrip opened at Rs 3,151 after it had closed at Rs 3,184.75 on Thursday. After touching an intra-day high of Rs 3,194, the stock was down 0.62 per cent to Rs 3,165. The market valuation of TCS, a key constituent of Sensex, stood at Rs 11,58,419.07 crore on the BSE. On the NSE, the company was down 0.47 per cent to Rs 3,169.90. It had opened at Rs 3,150.50 after ending the day at Rs 3,185 on Thursday. "Our core principle has been and will continue to be working for and with our customers and that will continue under me. I don't expect or you (media) should expect, any great strategic changes under me," 58-year-old Krithivasan told reporters through video-conferencing on Friday. Outgoing CEO Gopinathan was also present in the video conference. "In fact, TCS does not have a culture of making radical strategic changes when it gets a new CEO. We will continue as we have been -- focusing on customers. But of course, changes will be there as the markets demand us to make. Our culture of 'One Team' will remain the core focus," he said. "It's a continuum, we don't change strategically when a new CEO comes in. But we will change according to what our customers want and how the market changes. We will not make any short changes but will continue to drive on our core focus of being with the customers," he elaborated. "I hope to double down on our deliveries," he asserted. Gopinathan said his 22 years at the TCS has been "fantastic". "And having decided to move on, which was taken after a lot of deliberations with the family and the group chairman and my mentor N Chandrasekaran, I feel so light now. "During past six years I helmed the TCS team with thrill. And I enjoyed each day I spent with the company. But today I have mixed feelings. Yes, I am also a bit sad as the reality sinks in and at the same time I also feel very light now," he added. During his six years, he added over USD 10 billion to the company's incremental revenue and over USD 70 billion to its market capitalisation. In the first nine months of this fiscal, he delivered a revenue growth of 14.8 per cent in constant currency terms, the best in the industry. On the timing of his resignation, Gopinathan said, "We are in the most stable times given what we have gone through in recent years. Of course, there are some ups and downs. It was important for me to announce the decision before the start of the new fiscal year." He refused to reveal his plans, except saying "have many ideas for the future". "I feel so happy and light now, it's completely liberating now, but a week before it was so consuming me a lot. Also, it is always better to leave when the going is good and not when everyone is rooting for my ouster," he said. "The timing now was logical to follow. I have been meeting Chandra off and on and been telling him that I wanted to move on. So better to pull the trigger now. Yes, TCS has been integral to who I am and so is the group to me. Never had a second thought. And I am sure my contributions to TCS will be lasting. In the past 22 year, I never ever thought about anything other than TCS," Gopinathan said as he turned emotional. On is priority now, he said, "my immediate priority is that Krithi steps in smoothly and I will be available 100 per cent for him". On the transition challenges, Krithivasan, who has been with the company for the past 37 years, said in a lighter note that shifting out of Chennai will be more challenging than the job of the CEO. "Transition is not rocket science as we have a stable team and we have worked together for so many years. Most important, certain business verticals I know well and the rest I will learn from Rajesh, he said, adding, "but we owe to our customers and stakeholders for our success and that will be my core focus -- doubling down on our deliveries." Krithivasan said he is sure about success "as we are blessed with the one-team culture. We have so many leaders to replace me in the BSFI vertical and we don't expect any dramatic changes going forward. Our core principle has been working customers and that will continue". SEE ALSO: <a href="https://www.businessinsider.in/business/corporates/news/tcs-is-an-integral-part-of-who-i-am-ill-be-a-part-of-tcs-too-as-it-soars-rajesh-gopinathan/articleshow/98722638.cms">TCS is an integral part of who I am, I’ll be a part of TCS too as it soars: Rajesh Gopinathan</a> <a href="https://www.businessinsider.in/business/corporates/news/k-krithivasan-an-iit-kanpur-graduate-appointed-as-tcs-ceo-designate/slidelist/98725089.cms">TCS CEO-designate K Krithivasan is an IIT Kanpur graduate &amp; an old company hand</a> <a href="https://www.businessinsider.in/business/telecom/news/airtel-follows-jios-footsteps-starts-offering-unlimited-5g-data-check-out-the-plans/articleshow/98724214.cms">Airtel follows Jio’s footsteps, starts offering unlimited 5G data – here are the eligible plans</a>

TCS's new CEO-designate K Krithivasan confident about doubling down on customer deliveries

<ul><li>Despite the March quarter shocker, <keyword id="6354512" type="General" weightage="100" keywordseo="infosys" source="Orion">Infosys</keyword> has beaten its larger rival <keyword id="6357150" type="General" weightage="80" keywordseo="tcs" source="Orion">TCS</keyword> in four out of the last five financial years in terms of constant currency revenue growth.</li><li>TCS’ underperformance during these years could be one of the reasons for outgoing CEO Rajesh <keyword id="221979" type="General" weightage="80" keywordseo="gopinathan" source="Orion">Gopinathan</keyword>’s sudden resignation, as per reports.</li><li>While Salil Parekh-led Infosys has delivered during the highly volatile Covid-19 pandemic when TCS struggled, it remains to be seen if it can continue to outperform its larger rival.</li></ul>Even as it delivered<a href="https://www.businessinsider.in/business/corporates/news/infosys-sees-4-7-revenue-growth-in-fy24-after-it-misses-its-own-fy23-revenue-guidance/articleshow/99467637.cms"> disappointing</a> March quarter results, the Salil Parekh-led Infosys has beaten its larger rival Tata Consultancy Services (TCS) in four of the last five financial years in terms of constant currency revenue growth. Through all these years, TCS was led by its outgoing chief executive officer (CEO) Rajesh Gopinathan. Gopinathan’s sudden resignation, <a href="https://www.businessinsider.in/business/corporates/news/tcs-is-an-integral-part-of-who-i-am-ill-be-a-part-of-tcs-too-as-it-soars-rajesh-gopinathan/articleshow/98722638.cms">announced in March</a>, comes at a time when the IT sector’s future looks uncertain due to concerns of demand slowdown going ahead.<a href="https://www.businessinsider.in/business/corporates/news/tcs-q4-fy23-revenue-growth-slowest-in-11-quarters/articleshow/99439692.cms"> TCS</a> and<a href="https://www.businessinsider.in/stock-market/news/infosys-shares-tank-after-a-disappointing-q4-fy23-performance/articleshow/99548980.cms"> Infosys’</a> commentary while announcing the March-quarter earnings further highlighted these concerns. For context, Gopinathan received a 5-year extension as TCS’ MD and CEO in 2022, which means his term was valid till 2027. So, what explains his sudden resignation? We try to decode this by digging into numbers. <cmsannotation type="cmsannotation" annotationid="Gopinathan’s sudden resignation: More to it than meets the eye" comment="subhead" text="Gopinathan’s sudden resignation: More to it than meets the eye">Gopinathan’s sudden resignation: More to it than meets the eye</cmsannotation> It’s not just the uncertain future that might have led to the leadership change at India’s largest IT services company. There have been <a href="https://www.livemint.com/companies/news/behind-gopinathan-s-abrupt-exit-simmering-tensions-11679250120987.html">murmurs</a> about Gopinathan bowing out because TCS underperformed Infosys under his leadership, and now numbers back this up. According to a Business Insider India analysis, Infosys is ahead of TCS by 2.42% on average in constant currency (cc) revenue growth between FY19 to FY23. Noteworthy in this period is FY21, a year marred by the Covid-19 pandemic – Infosys delivered a 5% revenue growth (in cc terms) while TCS reported a degrowth of 0.8%. <div type="image" title="TCS vs Infy cc revenue growth FY19-23." msid="99580806" hostid="261" caption="&amp;lt;p&amp;gt;TCS vs Infosys&amp;#39; constant currency revenue growth since FY19&amp;lt;/p&amp;gt;"></div> Analysts at Nuvama Institutional Equities also termed Gopinathan’s resignation as a surprise. Further, while TCS said that Gopinathan would continue with the company till September this year to assist with the leadership transition, CEO-designate Krithi Krithivasan is now set to take charge three months earlier, in June. It’s not just the revenue growth where TCS has underperformed its smaller rival Infosys – the company’s stock has also delivered a return of 84% over the last five years. Infosys’ shares, on the other hand, have recorded a growth of 114% in the same period. To Gopinathan’s credit, however, TCS has beaten Infosys in terms of operating margin in all the past five financial years, recording an average of 25.1% as compared to Infosys’ 22.52%. <cmsannotation type="cmsannotation" annotationid="Tough times on the horizon" comment="subhead" text="Tough times on the horizon">Tough times on the horizon</cmsannotation> Leading TCS going forward will be Krithi Krithivasan, another company veteran who until now led the company’s BFSI vertical (banking, financial services and insurance). While Krithivasan has so far maintained that there won’t be any major strategy changes, the banking sector crisis in the US and Europe will require him to be more agile. The going looks tough for Infosys, too, especially in light of its Q4 shocker and commentary about “unplanned deal ramp downs”. With the US and Europe expected to record GDP growth of 1.6% and 0.8% respectively in 2023 according to the International Monetary Fund’s latest World Economic Outlook, navigating economic uncertainties will require a wartime CEO given that the US and Europe are the biggest markets for Indian IT companies. Krithivasan will not only have to navigate these tough waters, he will also have to deliver on another front – outperform rival Infosys. To Infosys CEO and MD Parekh’s credit, his company has outperformed its much bigger rival even during the highly volatile Covid-19 pandemic. It remains to be seen if Infosys can continue this outperformance. SEE ALSO: <a href="https://www.businessinsider.in/business/corporates/news/sbi-hul-tcs-kotak-bank-and-hdfc-and-other-big-companies-ceo-will-change-in-next-12-months/articleshow/99574790.cms">Companies with $465 billion in combined market cap to see a CEO change in the next 12 months: Here’s what investors should do</a> <a href="https://www.businessinsider.in/finance/banks/news/hdfc-hdfc-bank-merger-to-bring-inflows-of-up-to-3-billion-all-eyes-now-on-the-merger/articleshow/99557243.cms">HDFC-HDFC Bank merger to bring foreign inflows of up to $3 billion</a> <a href="https://www.businessinsider.in/stock-market/news/infosys-shares-tank-after-a-disappointing-q4-fy23-performance/articleshow/99548980.cms">Infosys shares tank over 9% post a disappointing Q4, analysts caution demand moderation ahead</a>

Infosys has beaten TCS in constant currency revenue growth in four of the last five years

TCS Q4 constant currency revenue growth hits a 11-quarter low

<ul><li><keyword id="6357150" type="General" weightage="100" keywordseo="tcs" source="Orion">TCS</keyword> missed street expectations in terms of profitability and margins in Q4 amidst a worsening macroeconomic environment. </li><li>The IT major flagged pain in the US market, noting that the banking sector crisis has impacted and, in some cases, even halted discretionary spends of clients. </li><li>While acknowledging that this pain could continue in the short-term, the company refused to give guidance citing uncertainty. </li><li>However, it maintained optimism over the medium and long-term citing a healthy orderbook. </li></ul>Indian IT bellwether Tata Consultancy Services (TCS) struck a note of caution and flagged concerns in the US, its largest market, after reporting its fourth-quarter results. The banking crisis in the US has led to clients either cutting discretionary spending or even halting non-critical projects, it added. The company<a href="https://www.businessinsider.in/business/corporates/news/tcs-q4-fy23-revenue-growth-slowest-in-11-quarters/articleshow/99439692.cms"> on Wednesday reported</a> its slowest constant currency revenue growth in 11 quarters, and refused to give guidance due to economic uncertainties. The outgoing chief executive officer (CEO) Rajesh <keyword id="221979" type="General" weightage="80" keywordseo="gopinathan" source="Orion">Gopinathan</keyword> accepted that the numbers were “definitely weaker than anticipated”. “Last quarter, we expected North America to recover through the start of the year meaningfully. This recovery has obviously not materialised and turned out to be more negative than we had expected,” Gopinathan said. In a post-earnings conference call with analysts, Gopinathan was cautious and pointed out that the near-term visibility remained limited due to rising economic uncertainties. Despite this, the company remained confident in its competencies in the medium and long term. “Customer sentiment across the BFSI (banking, financial services and insurance), retail and technology services verticals, particularly in Europe and US, was one of caution,” said Gopinathan. The BFSI vertical is the biggest for TCS by far – it contributed to over half of the company’s total net profit in FY23. TCS missed street estimates in terms of profit, which came in at ₹11,392 crore for the March quarter, lower than the expected ₹11,550 crore. Its operating margin was also sequentially flat at 24.5% in Q4, while analysts had estimated a 40-70 basis point improvement. Reacting to the company’s results, TCS’ shares were down by nearly 2% in trade on Thursday. In 2023 so far, its shares are down 2.2%. <cmsannotation type="cmsannotation" annotationid="Banking sector crisis forces clients to rethink spending" comment="subhead" text="Banking sector crisis forces clients to rethink spending">Banking sector crisis forces clients to rethink spending</cmsannotation> While TCS’ banking sector clients remained steadfast in their relationship with the company, the spillover of the banking crisis involving the collapse of five banks in the US and Europe in March was visible in other clients, who ended up cutting their discretionary spending, Gopinathan said. “Clients deferred newer initiatives which were not critical. In some cases, [they] completely halted discretionary projects,” said Gopinathan. Economic uncertainty has loomed large over the performance of Big Tech in the US too. Apple, the world’s largest publicly-traded company, fell short of earnings expectations in the December quarter due to lower iPhone sales and supply chain disruptions in China brought on by the country’s strict zero-Covid policy. Google-parent Alphabet said its ad partners could cut back spends, while e-commerce giant Amazon forecast lower demand. Overall, the tech-heavy Nasdaq is down by more than 12% in the last one year. Apple’s shares are down over 6% in this period, while Alphabet has lost nearly 20% of its value. Amazon has lost the most, with a decline of over 37%. Gopinathan and TCS’ CEO-designate Krithi Krithivasan noted that there has been weakness across sectors in the US due to economic uncertainty and that this could continue in the short term. Krithivasan said, “we are comfortable in the medium to long-term.” <cmsannotation type="cmsannotation" annotationid="Analysts maintain optimism" comment="subhead" text="Analysts maintain optimism">Analysts maintain optimism</cmsannotation> While TCS struck a note of caution, analysts maintained their optimism about the company’s prospects, noting that the spending cuts by clients could just be a knee-jerk reaction, especially in light of TCS’ strong demand pipeline. “Discretionary spending cuts in Q4 were more of a knee-jerk reaction by clients in response to the risk of banking contagion rather than deterioration in demand environment,” said JM Financial, adding that growth could rebound once sentiments improve. As far as the orderbook goes, Q4 was strong for TCS with a total contract value of $10 billion. The company maintained that the deal velocity and the pipeline were both strong and that clients were not cutting back on more critical projects like IT transformation and tech adoption. Despite the worsening macros, analysts at Motilal Oswal also remained optimistic overall about TCS, stating that a slowdown was partially factored into their estimates. Krithivasan also underlined that the revenue cycle could speed up in FY24, due to an expected reduction in the share of mega deals, which usually come with a longer gestation period, and a parallel rise in smaller deals. With the International Monetary Fund cutting the global economic growth outlook to 2.8% in 2023, it remains to be seen how long it will take for sentiments to improve. For now, TCS and its incoming CEO Krithivasan are banking on the company’s strong order book, but the company says it will “adjust according to client needs''. SEE ALSO: <a href="https://www.businessinsider.in/business/corporates/news/tcs-q4-fy23-revenue-growth-slowest-in-11-quarters/articleshow/99439692.cms">TCS Q4 constant currency revenue growth hits a 11-quarter low</a> <a href="https://www.businessinsider.in/business/auto/news/after-languishing-since-fy19-two-wheeler-growth-to-outpace-passenger-vehicles-in-fy24-25/articleshow/99438958.cms">After languishing since FY19, two-wheeler growth to outpace passenger vehicles in FY24-25</a> <a href="https://www.businessinsider.in/business/corporates/news/retail-investors-increase-stakes-in-all-adani-stocks-after-hindenburg-report/articleshow/99429000.cms">Retail investors ‘buy the dip’ in all ten Adani group stocks</a>

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Infosys has beaten TCS in constant currency revenue growth in four of the last five years

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TCS Q4 constant currency revenue growth hits a 11-quarter low

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TCS flags pain in US markets, says banking sector crisis has led to cuts in discretionary spending

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