Looking Back At Infosys CEO Salil Parekh's Journey With The IT Giant As He Gets Re-appointed For 5 Years

IT giant Infosys yesterday announced the re-appointment of Salil Parekh as its CEO and MD till March 31, 2027. In his tenure as CEO & MD, which began on January 2, 2018, Infosys has reportedly seen its shares rallying 187%, and its market value rising by nearly ?4 lakh crore to arrive at Rs 6.22 lakh crore.

That¡¯s not all.

The average price target of the stock more than doubled from ? 1,053 at the time of Parekh joining in 2018 to ? 2,121 by January 2022, showing the stock market investor¡¯s confidence in the IT major, even after some disappointment over fourth-quarter results resulted in trimming of Infosys average price to Rs 1,964 a piece in the last one month, as per an ET report.

Infosys¡¯s annual consolidated total revenue too, rose from ? 73,715 crore in FY18 to ?1,23,936 crore in FY22, while the consolidated net profit grew to ?22,112 crore in FY from ?16,029 crore in FY18.

All these numbers are indicative of how well the IT giant has been performing under CEO Parekh¡¯s tenure in the past four years and showcase the company¡¯s confidence in him through this tenure extension.

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The Highlights Of CEO Parekh¡¯s 4 Years

In January 2018, barely 10 days after joining Infosys, Parekh launched a review structured around market opportunities, client relationships, people dimension and service offering.

He had detailed the outcome in April 2018¡¯s earnings call, where he talked about four pillars, including scaling the digital services business that represented 25.5% of the company's revenue in FY18.

And in Financial Year 2021-22, digital revenues shot up and accounted for 59.2% of the company revenues, up from 51.5% in FY 2020-21, as per the ET report.

CEO Salil had also talked about the importance of applying intense automation and artificial intelligence to improve productivity, reskilling employees and ¡®expand localisation¡¯ in the US by building delivery centres, training centres, and hiring locally in his April 2018 earnings call.

Under Parekh, Infosys reportedly altered its capital allocation policy in 2019 and announced giving back 85%of its free cash flow to shareholders effective FY20. The company was earlier distributing up to 70% of its free cash flow to its shareholders.

On the earnings front, Infosys surprised in seven, disappointed in two and produced in-line quarterly results on three occasions in the last three years.

That included the March quarter's disappointment. The company logged a compounded annual growth rate of 9 per cent in consolidated profit and 13.1% in total revenues during the three-year period, as per the ET report.

The report also mentioned that CEO Parekh said "Growth is a function of what we have already been in contract with, which are very strong large deals, nine-and-a-half billion and what we see in the future is very strong uptake. You might also have noticed last quarter we had 22,000 new employees join us. So we are definitely building for good growth this year.", as per an interview with ET NOW this month.

"What we see is that digital work is massive, so as long as we build the capability on digital and cloud, we feel that we will continue to do well," the Infosys CEO had said.

The Infosys management has guided for revenue growth of 13¨C15 per cent for FY23 and a margin band of 21¨C23 per cent, which some analysts found conservative.

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