New CEOs scripting successful turnarounds: Mid-tier IT firms on higher growth path
Trend of getting leaders from large IT firms is likely to continue as most mid-tier firms search for next-phase of growth
Nomura released a note that highlighted the significant improvements at Birlasoft attributed to the organization-wide transformation under Guha’s leadership. It also acknowledged both margin stability and robust deal wins under the new CEO, putting the company on good stead
Turning Over A New Leaf
- Birlasoft, Coforge, ITC Infotech seen sound results
- Boards of mid-tier firms preferring leaders of large firms to take over the reins
- It’s to be seen how Tech Mahindra performs as new CEO takes over
Bengaluru: Many mid-tier IT firms have scripted a successful turnaround story post induction of new Chief Executive Officers (CEOs) in recent years and are able to navigate the current tepid demand environment better than their peers.
Experts are of the opinion that companies like Birlasoft, Coforge, and ITC Infotech among others have seen considerable improvements in their performances post CEO change. Similarly, Tech Mahindra, which is going to see new CEO taking over soon, is receiving favourable response from market as the CEO transition will take place shortly.
“Mid-tier firms like Coforge, Birlasoft & ITC Infotech have definitely shown tangible improvement in their performances post induction of new CEOs. Earlier, CEOs of these companies used to be internal candidate, but now, promoters prefer to get leaders from large IT firms for steering the company towards its next phase of growth,” said an industry analyst, who had worked with some of these top leaders.
Sources also opined that despite slowdown, these companies are performing better despite demand slowdown by participating in cost takeout deals of clients.
Angan Guha, who took over the reins of Chief Executive Officer at Birlasoft in December, 2022, joined the firm from Wipro where he used to lead Americas 2 strategic market unit. Despite initial hiccups, the performance of Birlasoft has significantly improved as reflected in the second quarter of current financial year.
Nomura released a note that highlighted the significant improvements attributed to the organization-wide transformation under Guha’s leadership. It also acknowledged both margin stability and robust deal wins under the new CEO, putting the company on good stead.
Similarly, Sudhir Singh, who joined Coforge after a decade-long stint at Infosys, was able to turnaround the fortune of Coforge (earlier NIIT Technologies). Under his leadership, Coforge has already crossed the revenue milestone of $1 billion mark and remains one of the fastest growing mid-tier firms in India.
This is obvious from its revenue growth projections for FY24, which is 13-16 per cent in constant currency term. At a time when large firms are expecting low single digit revenue growth for FY24, Coforge’s growth projections remain one of the highest among all large and mid-tier firms.
Similarly, ITC Infotech- the unlisted subsidiary of FMCG major ITC, is clocking good growth under its current CEO, Sudip Singh. An Infosys veteran, who joined ITC Infotech four years back, has already more than doubled company’s revenue since he took over the reins of the chief executive, sources in the know said.
“The trend of getting leaders from large IT firms is likely to continue as most mid-tier firms search for the next-phase of growth,” said an analyst.
