If you are a Infosys shareholder, then you should read this…

Dev Ashish

11 years ago

Disclosures: No positions in Infosys.

Sometime back, Infosys came out with its Annual Report. And since I had no positions in the company, materially speaking I am not affected by it. But since Infosys has a lot of negative sentiment going around it, I was curious too see what management had say about it.

What does the future hold for this company?

So out of curiosity, I went through company’s annual report (link). And there was something in the report, which caught our eyes.

Nothing to worry.

With all negatives news surrounding the company, I felt something different. Now, ‘felt’ can be a dangerous word in stock markets. So please beware. I may be getting emotional with this one. So, you take your own call and decide for yourself. All the underlined words in rest of this post show that I might be getting a little irrational and emotional after reading things in the said document (i.e. Annual Report), which is prepared by people who are incentivized to sugarcoat and show us a good picture of the company 😉

So this is what I felt…

Everyone thinks that Infosys is down and out. Almost everyone I had a chat with felt that it was founders decision of playing passing-the-parcel with CEOs position, that was the main reason behind company’s downfall. Many question Infosys’s conservative attitude too. And to be frank, I don’t really understand what really went wrong with the company. Was it one of these reasons or a combination of all of them? I don’t know.

But while going through company’s Annual Report, I really liked a few things which current CEO, Shibulal had to say…

Changes are tough and they take time to show results. The company seems to be making changes which are hurting it in the short term. But these may put company on a better growth trajectory in the long term. Company’s management is being honest that they too are anxious about Infy’s current status.

The CEO went on to say that they ‘are listening and learning’ from their good and bad choices. And, situations like these ‘do cause the rare moment of self-doubt.’

Now, how many CEOs are ready to admit such a thing?

I liked the honest and tell-all approach which Infosys is following. And with all the cash that company has accumulated (Rs 24,000 Crores plus at the time of writing), I feel that it may only be a matter of time before something interesting might take place. It may be something related to their Transformation 3.0 or something totally different. This is just my view or rather a gut feeling.

If you do understand this sector well, I would appreciate if you could give some inputs on the issue for benefit of the readers.

Waiting to hear from you guys…