After change of guard, what to expect from TCS? Varun Lohchab answers

“These organizations typically have a very strong leadership pipeline and a fairly large number of leaders are groomed every year for these kinds of opportunities. We are not overly worried. We would like to wait and watch and hear him out but it definitely came as a surprise, but not something that one should get overly worried about,” says Varun Lohchab, Head of Research- Institutional Equities, HDFC Securities

Do you have any specific take on TCS. We are going to see a change of guard there. What would this possibly indicate in terms of the long-term strategy for the company? What is it that the shareholders want to hear from the new management?
Obviously, it was a surprise element. Nobody was geared up for this news but at the same time, it is a positive fact that the new CEO is from within the company and has spent a lot of time in the system. He knows the company really well. Therefore we expect and what investors would like to hear is consistency of strategy, that there should not be any change in stance in the way the business is being done.

The business has been run fantastically in the last 10-15 years and if continuity were to happen, that would make investors fairly happy. So we are not overly worried given the fact that the person replacing seems equally capable. He has worked in the organization for a long time. He has headed different parts of the business and so the understanding would be there.


Plus, these organizations typically have a very strong leadership pipeline and a fairly large number of leaders are groomed every year for these kinds of opportunities. We are not overly worried. We would like to wait and watch and hear him out but it definitely came as a surprise, but not something that one should get overly worried about.