Infosys Ltd. (INFO) named Vishal Sikka chief executive officer as India’s second-largest software services exporter turns to the former SAP AG executive to help reverse four straight years of narrowing profit margins.
Sikka, 47, will replace S.D. Shibulal and take charge on Aug. 1, Infosys said in a statement today. This is the first time the company based in Bengaluru, formerly known as Bangalore, will have a non-founder as CEO.
The new CEO will face the task of getting contracts in an environment where companies want mobile applications to interact with consumers and rent shared computing services rather than maintain their own servers. Sikka faces the additional challenge of taking charge at a time when almost a dozen senior executives have left since co-founder N.R. Narayana Murthy returned as chairman last year to help revive revenue growth.
“There was greater concern on investors’ minds about management direction as a sector leader,” Vineet Bhatnagar, managing director at PhillipCapital India Pvt., said on Bloomberg TV India. “Today’s announcement gives a lot of assurance to portfolio investors who look at the stock as a long-term hold for India ownership.”
Infosys declined 0.6 percent to 3,175.05 rupees at the close in Mumbai trading, after earlier gaining as much as 3.3 percent. The stock has gained 31 percent in the past 12 months, lagging behind larger competitor Tata Consultancy Services Ltd. (TCS)’s 52 percent climb and third-rankedWipro Ltd. (WPRO)’s 55 percent surge in the period.
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