Nilekani's return to Infosys gives company best start in 6 years: CLSA

New Delhi: Co-founder Nandan Nilekani's return to Infosys as Chairman is the "best start" for the IT firm in six years and will help the company regain leadership stability, strategic relevance and resolve cultural battles, according to analysts.

Nilekani, who was named as the non-Executive Chairman of Infosys last week, returned to the company after months of acrimony between the founders and the management led to the abrupt exit of CEO Vishal Sikka.

The founders, led by N R Narayana Murthy, had alleged corporate governance lapses at the country's second-largest software services firm.

While the board had defended itself, last week saw the then chairman R Seshasayee along with two independent members step down, with Nilekani coming back to the company. Sikka had resigned from the CEO position on August 18.

"Nandan Nilekani's return to Infosys gives it the best start in six years in regaining leadership stability, strategic relevance and resolving cultural battles," CLSA said in a report.

It added that the new chair has stepped up the pace of CEO selection, strategic reassessment and alignment of stakeholders, which has been a positive surprise.

"With a likely change in strategic direction at Infosys, better than expected leadership and low valuation, we think risk-reward has improved sharply," it said.

Industry veteran Ganesh Natarajan said Infosys has to clearly put in place whatever actions are needed to ensure the board can play its role responsibly.

"They have to clearly now get their act in place in terms of how to deal with serious pressure groups and at the same time, be a responsible board and give management the elbowroom it needs to implement what it should," he added.

Asked if Nilekani will also have to get into strategy and execution - notwithstanding that an interim CEO is in place - till a final appointment is made, he answered in the affirmative.

"While he may distance himself from actual execution, I think strategy is very much part of what he has to do and he will do it," he added.

Natarajan said Infosys needs a "visionary" CEO who is not just a technology maverick but also someone who can "manage the board and pressure groups" and take the organisation along.