NR Narayana Murthy
NR Narayana MurthyReuters

The upbeat earnings posted by Infosys for the June 2015 quarter has revived hopes of those investors and analysts who had lost confidence in India's second largest IT firm, after it reported disappointing results for several quarters.

The Bengaluru-based IT major even surpassed its biggest rival Tata Consultancy Services (TCS) in revenue and volume growth in the April-June quarter for the first time in two years.

Many analysts attribute the upbeat performance of Infosys to initiatives taken by CEO Vishal Sikka, who took charge in August last year.

But some analysts attribute the first quarter performance of Infosys to its co-founder Narayana Murthy, who helmed the company between June 2013 and June 2014. After his retirement, Murthy returned to Infosys as its Executive Chairman in June 2013.

"He (Narayana Murthy) restructured the organization, made it much more focused, helped bring in greater energy and faster decision making, found a new CEO and left," former Infosys CFO Mohandas Pai wrote in June this year. 

During his 13-month tenure, the company saw about 12 of its top executives quitting their jobs. Infosys' global sales head, head of US sales, BPO sales head, India head and a former chief financial officer were among those executives who left the company.

Analysts said the exodus at the top level witnessed during Murthy's period could have helped Infosys improve its performance.

"A number of senior executives at Infosys who had risen up the ranks purely by virtue of being present at the right place (Infosys) at the right time (pre-IPO) had by 2008 turned into a bottleneck for growth. Rich with vested stock, they lacked both the motivation and often the competence to pound the pavement and get the orders. We understand that a lot of this deadwood was cleared by Mr. Narayana Murthy," Sagar Rastogi and Utsav Mehta of Ambit, told NDTV Profit.

Last year, Murthy had said that non-performance was the main reason behind the "top-level exits" during his tenure.

Infosys' sequential revenue growth of 4.5% during the June quarter in dollar terms was the highest in the past 15 quarters. On a quarterly basis, the volume growth of 5.4% during the quarter was also at its highest level not seen in the previous 19 quarters.

Following the robust performance, many brokerages have upgraded their outlook for the Infosys stock. 

However, some are still cautious on the company's stock. "One swallow doesn't make a summer," said Emkay Global.

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