While the exit of Rajesh Gopinathan as MD CEO surprised many on Dalal Street, the appointment of K Krithivasan did not. Krithivasan is first among equals in many ways in the organisation, according to analysts, as Krithivasan is responsible for a large BFSI portfolio of $11 billion, has grown the business consistently and is involved in many strategic decisions.
In the past, Krithivasan was among the front-runners for the CEO role, according to Kotak Institutional Equities.
Given the size of the portfolio handled by him, we wouldn't be surprised if he would have been a key candidate for the CEO role in 2017. Kotak said he handles a large portfolio of $11 billion and grew the portfolio in a consistent manner.
Krithivasan may have been a regular contributor to the strategic direction of the business, according to the brokerage.
A new CEO appointment usually leads to the exit of disappointed front-runners. While exits are possible, it must be pointed out that Krithivasan was a clear frontrunner in case Rajesh wished to step down, Kotak said.
Motilal Oswal Securities noted that unlike previous transitions, where incoming CEOs had a long runway in front of them until retirement at 65 years - S Ramadorai CEO at 51 years N Chandrasekaran CEO at 45 years and Gopinathan CEO at 46 years. Krithi is 58 years old and will be CEO for the next 6 -- 7 years only.
It expects that TCS will continue to benefit from the recent changes in its operating model in 2022 as well as the recent intake of freshers in the system, although this limits the flexibility for him.
Kotak said when N Ganapathy Subramaniam NGS was appointed COO in February 2017 he was 57 and had two years left in his tenure.
The President and Global Head of the BFSI business group at TCS is K Krithivasan. He has 34 years of experience in TCS. During his long tenure at TCS, he has held various leadership positions in delivery, customer relationship management, large program management and sales. Krithivasan is also a member of the Board of Directors of TCS Iberoamerica, TCS Ireland and the supervisory board of TCS Technology Solutions AG. He holds a Bachelor's degree in mechanical engineering from the University of Madras and a Master's degree in industrial and management engineering from IIT Kanpur.
We believe that TCS is a well-oiled machine and has a long history of seamless transitions at all management levels. Most of its leadership positions have been held by TCS veterans who have risen through the ranks. BFSI is the largest segment of TCS, contributing over 30 per cent of revenue in Q 3 of FY23, making Krithivasan the perfect choice for the role, according to Nuvama Institutional Equities.
Krithivasan will only be its fifth CEO in the 55 years of TCS'history, a testimony to the stability and quality of its management, Nuvama said. TCS was founded in 1968.
This management transition hasn't seen a lot of disruption. Any drop in stock price must be used as an opportunity to add as valuation is no longer expensive, making risk-reward profile attractive, it said.