Infosys shares fell as much as 7.6 per cent in opening trade on Thursday after the IT major said on Wednesday that its president and board member BG Srinivas has resigned. Infosys was the top loser on the 50-share Nifty benchmark. (Track stocks)
Mr Srinivas, the 10th high-ranking official to quit Infosys in the last one year, was seen by some investors as a candidate to take over as CEO.
In April, Infosys started a search for new CEO after current chief executive SD Shibulal said he wanted to retire in January 2015 or before. With Mr Srinivas' exit, the possibility of an external candidate taking over as Infosys CEO has increased, analysts say. (Read the full story here)
"The fact that he has left the company indicates he was no longer in the running for the top job," said Bhavin Shah, CEO of brokerage Equirus Capital. "He was a key person from a client interaction perspective, so it's a big loss for the company."
Brokerages were quick to downgrade the stock citing increased uncertainty at the top level.
Market analyst Sanjeev Bhasin put out a sell call on Infosys with a target of Rs 3,000.
Bank of America Merrill Lynch said Mr Srinivas' departure can negatively impact employee morale at Infosys. Australia-based Macquarie said the exit can weaken already dampened sentiments and constant churn at top level is a negative for the stock.
JP Morgan said Mr Srinivas' exit is a disappointing outcome and the road to recovery for Infosys has only got more protracted.
Infosys is grappling with high attrition levels as compared to its peers. In the quarter ended March 31, Infosys reported an attrition rate of 18.7 per cent, the highest level among its peers. (Read)
(With inputs from Reuters)
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