India's TCS CEO Gopinathan to exit, president Krithivasan to take over
Adds quote from media call, analyst quote, share movement
By Sethuraman N R
BENGALURU, March 17 (Reuters) -Tata Consultancy Services (TCS) TCS.NS CEO Rajesh Gopinathan is resigning in an unexpected move to pursue other interests, adding to worries for India's largest IT services provider amid slowing tech spending and challenges in its key markets.
The company named its president and head of global financial services business KKrithivasan as the CEO-designate, effective March 16, and said he would take over as CEO and managing director in the next financial year, subject to shareholders' approval. Krithivasanjoined TCS in 1989 and has held various leadership roles at thecompany.
The development comes as India's IT industry contends with a challenging macroeconomic environment in its key markets of Europe and the United States, while a turmoil in the U.S. banking sector from which it draws the bulk of the revenue poses fresh hurdles.
"Rajesh’s unexpected departure adds volatility when TCS faces slowing tech spend, uncertain macro and hungry competitors and should be a derating driver for stock," JP Morgan analysts said in a note.
Gopinathan — who was re-appointed last year as the Indian IT behemoth's CEO until 2027— would leave TCS in September, the company said.
"I don't expect to see a great strategy change or organisational change coming in the immediate future," CEO-designate Krithivasan said in a media call on Friday.
Having been with TCSfor over two decades, Gopinathanhas held multiple leadership positions, including that of chief financial officer.
Under Gopinathan's leadership, TCS shares have nearly tripled in value, while revenuealmost doubled and profit jumped about60% as of December end.
TCS shares, which have lost nearly 3% so far this year, were down 0.3% as of 10:31 a.m. IST.
Elsewhere, rival Infosys INFY.NS is facing high attrition at the top, with five senior-level retirements or exits over the last one-and-a-half years.
Krithivasan's appointment comes amid a slew of leadership changes in the industry.While Cognizant Technology Solutions CTSH.O appointed former Infosys president S Ravi Kumar as CEO this January, Tech Mahindra Ltd TEML.NS recently named another Infosys veteran Mohit Joshi as its CEO.
Reporting by Anuran Sadhu and Nallur Sethuraman in Bengaluru; editing by Uttaresh Venkateshwaran and Rashmi Aich
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.