Friday, August 30, 2013

Nirmal Bang downgrades Infosys shares over senior-level exits

August 30, 2013(7star news):-After founder Narayana Murthy\'s return as executive chairman of Infosys, the company has witnessed a spate of senior-level management exits. Concerned over the sudden departure of several senior level departures, Nirmal Bang has downgraded the Infosys\' stock to \"sell\". In a report the brokerage said,\" While the return of Narayana Murthy is likely to lead to measures to get Infosys back on track, some of which have already been implemented, the senior-level management exits clearly suggest that stability at the top has not yet been achieved.\"

Nirmal Bang has has downgraded the rating on Infosys to \"sell\" from \"hold\" with a target price of Rs2,860.

Infosys shares have seen a run-up after Murthy\'s return, buoyed by good first quarter results and a weak rupee. \"As regards the stock price, we believe the 23 percent rise post Q1 FY14 results is overdone and it will take a few quarters for Narayana Murthry to start showing results in terms of higher revenue growth, even as a weak rupee provides support to margins,\" the report said.

The latest senior executive to leave is Ashok Vemuri, member of the board, head of the Americas region and also global head of manufacturing and engineering services. Most importantly, Vermuri oversaw the verticals that together account for over 56 per cent of revenue. Vemuri was also seen as a contender for future Infosys CEO.

Apart from Vemuri, Infosys also saw the departure of Basab Pradhan, head of sales, and Sudhir Chaturvedi, North America head of financial services. Prior to this, Shaji Farooq, senior vice president and head, consulting and systems integration, and Balaji Yellavalli, vice president and head of client services, US financial services and insurance, had also put in their papers recently.

However, the Infosys shares were trading lower today at Rs. 3,085.10, off 0.75 percent.
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