"If Infosys does not see improvement or traction in another 2-3 quarters, the next level of problems may emerge. Its clients will start worrying where their business is headed. Employees will start worrying about their career and future. Investor pressure and margin pressure will build up," Sudin Apte, CEO and Research Director at Offshore Insights, told ET.
Apte said it is "surprising" that CEO (SD Shibulal) is talking about succession planning even before he is settled into the new job. "Thought leadership position in Infosys is fading away. Uncertainty about leadership and its fallout continues."
Last month Infosys CEO SD Shibulal said that the next CEO will be from inside Infosys.
The growth in $50-million and $100-million clients as well their retention in these tough times, coupled with good growth of net client additions, indicates an opportunity for the company, Apte wrote in the report.
In a comparative analysis of the IT majors, Offshore Insights pointed out that TCS BSE -2.67 % is likely to maintain its leadership and gap with other IT players for at least the next three years.
The report said that TCS has managed to perform well on all aspects - revenue growth, number of clients, as well as large deals. "Now, it is looking even better than Infosys in the large deals space - $50 million and $100 million. TCS is also able to get additional business from existing accounts."
On HCL, the view was that even though performance has been middling in the last few quarters, it must substantially extend its vertical capabilities and improve profitability.
While HCL has strong capabilities in practice areas such as ERP, emerging technologies and infrastructure management, they lack in several other service lines like ADM, testing, and BPO.
On Cognizant, the report said that next 18 months will decide if the New Jersey-based company will be able to continue its growth momentum. Apte said that too much emphasis on mobility, analytics and cloud can be a concern.
