How Infosys has fared after Narayana Murthy’s return

In the interim, if Infosys is successful in cutting costs, there could be a surprise on the margin front Photo: Hemant Mishra/Mint
 Infosys Ltd is certainly making the right sounds and the right moves. The company said in a meeting with analysts at Barclays Securities (India) Pvt. Ltd that it is no longer hung up about maintaining premium billing rates but is rather focused on cutting costs to improve margins. Besides, it has increased focus on traditional outsourcing deals to return to industry growth rates.Needless to say, this will be music to the ears of investors. Even so, while the company may be making the right moves, the departure of some of its senior executives is likely to impact its momentum. Infosys has done fairly well in the past two quarters, and it has already managed to win a reasonable number of large deals. But every now and then, a senior executive has resigned, leading to concerns about the sustainability of the company’s recovery.
 Analysts at CLSA Research said in a recent note to clients, “Continuous churn and reallocation of responsibilities at the top does bring along the risk of undermining some of the good work done post (N.R. Narayana) Murthy’s return. A change in CEO scheduled in 18 months time could continue this top management flux.” Speaking to Barclays’ analysts, the company’s chairman N.R. Narayana Murthy said he isn’t worried about the churn in senior management, citing that Infosys has a full bench of senior managers to fill any gaps. Whether that is so, only time will tell. But by and large, momentum does get disrupted, given the close association senior management has with large customers.
 CLSA’s analysts wrote in their note, “Infosys believes that the second half of FY14 could be weak beyond normal seasonality, with the recent reallocation of management responsibilities impacting some growth. This is the key driver of Infosys’ weak implied revenue guidance of 1-2% quarter-on-quarter decline in the December and March quarters.”
 All this is not to say that some of these issues can’t get sorted out in the medium-term. In the interim, if the company is successful in cutting costs, there could be a surprise on the margin front, which will help reinforce investors’ belief about the recovery. Murthy told Barclays’ analysts that the company is looking to cut costs in three areas—a) decrease the proportion of senior people onsite by rationalizing its role ratio; b) reduce the usage of subcontractors by improving internal training; and c) reduce the number of people in onsite locations in business enabling functions.While all this is welcome, it remains to be seen to what extent the company gets flexible on pricing to win back market share, as this could completely wipe out the gains from cost cutting.
PRASHANT SHARMA
PGDM-I

Complaints from life insurance policyholders about unfair business practice by companies have grown by over 67% in 2012-13, says the consumer affairs booklet released on Wednesday by insurance regulator IRDA. The nature of complaints includes malpractices, difference in promised and actual features in products, non-refund of premium on policies cancelled during the free-look period, tampering or forgery of proposal forms and alteration in policy tenure without consent.

Malpractices to ..

Read more at:
http://economictimes.indiatimes.com/articleshow/26545863.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Complaints from life insurance policyholders about unfair business practice by companies have grown by over 67% in 2012-13, says the consumer affairs booklet released on Wednesday by insurance regulator IRDA. The nature of complaints includes malpractices, difference in promised and actual features in products, non-refund of premium on policies cancelled during the free-look period, tampering or forgery of proposal forms and alteration in policy tenure without consent.

Read more at:
http://economictimes.indiatimes.com/articleshow/26545863.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Complaints from life insurance policyholders about unfair business practice by companies have grown by over 67% in 2012-13, says the consumer affairs booklet released on Wednesday by insurance regulator IRDA. The nature of complaints includes malpractices, difference in promised and actual features in products, non-refund of premium on policies cancelled during the free-look period, tampering or forgery of proposal forms and alteration in policy tenure without consent.

Malpractices to ..

Read more at:
http://economictimes.indiatimes.com/articleshow/26545863.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst