Infosys clocks weakest Q1 in six years, picks Dash for CEO

Infosys has bet on a tried-and-tested veteran to steer the company through turbulent times, even as it reported its weakest June quarter in six years. India's second-largest IT services firm on Thursday named Ashiss Kumar Dash as CEO-designate, effective 1 April 2027, at a time when automation is sweeping across India's $300 billion IT industry.

Bengaluru-based Infosys marked a slow start to the fiscal year, even though it met analysts' expectations and outperformed three of its four large rivals. The company clocked $5.08 billion in revenue in the June quarter, up 0.83% sequentially and 2.8% on a yearly basis.

At a post-earnings press conference, Infosys chairman Nandan Nilekani was effusive in his praise of Dash. "He has worked in every part of Infosys, be it in delivery, be it in sales, be it in account management, starting a new data centre in Bhubaneshwar, everything, and he's someone who I think everybody likes, respects. He's an uncomplicated guy, focused on what needs to be done,” Nilekani said in his first opening address in almost three years.

Infosys reported $5.08 billion in revenue, marking a 0.83% increase sequentially and 2.8% year-on-year. Net profit was $819 million, down 11% from the previous quarter, but up 1.3% compared to the same quarter last year.

Infosys attributed the lowered growth forecast of 1.5% to 3% to softer technology spending by global clients amid high interest rates and ongoing geopolitical tensions.

Ashiss Kumar Dash has been with Infosys for over three decades, having joined the company in May 1995.

Chairman Nandan Nilekani emphasized Dash's combination of strong business performance, technical expertise, and his ability to drive bold transformation while preserving the company's values and customer trust.

The decrease in headcount to 328,062 employees and improvements in attrition rates may raise concerns about workforce stability, but it reflects the company's strategy to align with shifting client demands towards AI and efficiency.

Dash, currently executive vice-president and global head of energy, resources and services based in California, becomes Infosys's seventh chief executive, taking charge after Infosys added over $10 billion in business under Salil Parekh, who had joined in January 2018.

Nilekani said Dash steps into the shoes of Parekh, under whom the industry and the company have evolved.

In the June quarter, Infosys outperformed three of its peers—Tata Consultancy Services Ltd (TCS) that posted flat revenue growth, and HCL Technologies Ltd and Wipro Ltd with sequential declines of 0.9% and 1.4%. Among IT's Big Five, only Tech Mahindra fared better, with revenue growth of 2.2%.

"Overall, we continue to see the macro environment remaining uncertain,” Parekh said at the earnings call. Shareholders were disappointed, with Infosys shares on the New York Stock Exchange falling 5%. The earnings were reported post Indian market hours.

The demand outlook echoed its larger rival TCS, which too sees no sign of the environment changing. For now, the fifth-largest firm TechM is the sole Big Five company to sound optimistic.

The caution was reflected in the Infosys's guidance. The company guided for 1.5-3.0% full-year growth in constant currency terms, its weakest guidance in the last four quarters. Constant currency does not account for currency fluctuations.

The company got $417 million in revenue from advanced artificial intelligence during the June quarter. “On the AI revenue, I think it's moving so quickly that it is a bit up and down on a quarter-by-quarter basis,” said Parekh, adding that the AI business was growing in double digits. The company had first announced an AI revenue of $280 million in February.