(Adds quote from media call, analyst quote, share movement)
By Sethuraman N R
BENGALURU, March 17 (Reuters) - Tata Consultancy
Services (TCS) 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 K Krithivasan 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. Krithivasan joined TCS in 1989 and has held various
leadership roles at the company.
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 TCS for over two decades, Gopinathan has
held multiple leadership positions, including that of chief
financial officer.
Under Gopinathan's leadership, TCS shares have nearly
tripled in value, while revenue almost doubled and profit jumped
about 60% 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 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 appointed former Infosys president S Ravi
Kumar as CEO this January, Tech Mahindra Ltd 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)
