Co-founder and chairman adds goal is to conclude the whistleblower investigation in an appropriate manner, but not fair to give a timeline
Nandan Nilekani, co-founder and chairman of Infosys, came out to defend the company’s accounting and corporate governance standards at an analyst meet on Wednesday by saying rather dramatically that “…even God could not change the numbers in the company”. In a bid to win investor confidence, the company made it clear that it was focussed on growth, despite allegations made by whistleblowers in two anonymous letters recently.
Addressing analysts at the company’s Electronics City campus in Bengaluru, along with the entire senior management, Nilekani said the goal was to conclude the investigation in an appropriate manner, but refused to give a timeline for its completion. The senior management conveyed that the building blocks for future growth were in place, which would be supported by a strong margin discipline. Nilekani added that he would remain with the company “…till I am dispensable”.
Reiterating that no further evidence was shared with the company, Infosys said that it followed a process while dealing with such anonymous complaints and that in FY19 too it had received several such complaints. The company reiterated that no further evidence was shared by the whistleblowers through email, attachments or recordings.
Salil Parekh, CEO of Infosys, along with COO UB Pravin Rao and CFO Nilanjan Roy, shared operational details of the company’s transformative journey, large deal engine and capital allocation policy with analysts. Parekh said he was focused on transforming Infosys. In his presentation, he said enterprise, data and cloud would be the three mega drivers of growth for the company in the coming days.
The investment phase of the company was over in FY19 and capabilities have been built. He also said that he was strengthening the large deals engine, which helped the company report double-digit growth for four straight quarters. Infosys today has industry leading automation capabilities. Parekh added that the investment phase of the company closed in the fourth quarter of FY19 and that the focus was on operational excellence, which would drive margins in the coming quarters.
Nilanjan Roy said that the company was following a very progressive capital allocation policy and that it was focussed on 21 tracks across which the company was looking to optimise costs. In a bid to improve margins, the company said it would eliminate waste by adopting automation to improve delivery. In the coming quarters, SG&A costs would moderate as a percentage of revenues. Infosys is also looking at mergers and acquisitions to boost its digital service capabilities and consolidate its marketshare. Roy said that the company had a robust post-merger integration playbook.
Shares of Infosys had fallen by over 16% following the disclosure made by the company on October 21 pertaining to two whistleblower letters. Infosys is the country’s eighth most valuable company, with a market capitalisation of Rs 3.06 lakh crore. Shares of the company rose 2.4% on Wednesday.
Infosys has been mired in controversies for the last several years, ever since the founders stepped away from day-to-day operations. These distractions have had a bearing on the company’s business. The management told investors on Wednesday too that business was being run as usual despite all distractions and that the company was focused on clients and employees.