Infosys' three-year road map gets a thumbs-up from analysts

Even as the January – March 2018 (Q4FY18) results failed to enthuse investors, most analysts have given a thumbs-up to the three-year road-map laid out by Infosys to accelerate growth in the digital segment.

Infosys, which detailed its strategy to analysts in post market hours on Monday, also reiterated its capital allocation policy of returning up to 70 per cent of free cash flow (FCF) with periodic review of return cash balances.

Analysts say the strategy spelt out on Monday is geared towards building a services centric business model. They, however, caution that the company now needs a stable top management as execution of this vision is key.

“We don’t see this as a stark contrast to the previous leadership but the focus is now clearly more on services centricity of the business model. Infosys has a fair share of digital revenues (25.5 per cent of sales), but the execution will need a stable leadership,” say Rumit Dugar and Aniket Pande of IDFC Securities in a report.

Analysts at Edelweiss Securities agree. They believe Infosys’ new leadership is refining the strategy from where the previous CEO (Vishal Sikka) left it. The thrust, they feel, remains on design thinking, artificial intelligence (AI) and digital; albeit with quick realignment to where clients’ spends are shifting.