Despite top-level exits, Infy stock up 50% since Murthy return
Dec 25 2013 , Mumbai
In the eighth major exit since the return of Murthy six months ago, V Balakrishnan, Infosys head of BPO business, quit the company this month on whose Board he was also a member.
Infosys' shares are still trading at a record high and have shot-up by 48.85 per cent since June, although the shares fell by over 2 per cent a day after Balakrishnan's exit.
On December 20, the IT major's scrip had hit a 52-week high level of Rs 3,569.90.
The market value of the IT major has gained Rs 65,704 crore since Murthy's return.
"We believe that exit of Balakrishnan will not make any material impact at a business level as he was not heading a very big chunk of the company's revenue but the development does indicate that there is a severe management transition happening in the company," said Ankita Somani, Research Analyst IT, Angel Broking.
"Though the impact of top management resignations at Infosys will not immediately make an impact to its topline, it may have some effect over a medium term," she added.
Analysts said the rise in Infosys scrip is also because of the weak rupee.
Rupee is at present trading at 61.79 level against the US dollar. Fall in rupee versus the US currency is broadly seen as a positive for export-focussed sectors like the Indian IT space as large IT companies benefit from a weaker Indian currency, as it positively impacts their profit margins.
Big IT companies earn a major chunk of their revenues in dollar from their US clients.
According to Kishor Ostwal, CMD, CNI Research, "As long as rupee holds at 62-level, Infosys will remain in upward direction."
Said to be a top contender to the post of Chief Executive Officer, Balakrishnan, who joined Infosys in 1991 and later became its chief financial officer, resigned, just a day after Subrahmanyam Goparaju, senior vice president and head of Infosys Labs' quit.
This is the eighth high-profile exit in the IT major ever since Narayana Murthy returned at the helm in June, 2013 bringing along his son Rohan as Executive Assistant.
While Infosys global sales head Basab Pradhan quit in July, the company's global manufacturing head Ashok Vemuri resigned in August to join rival iGate as CEO. Stephen Pratt, who co-founded Infosys consulting, had stepped down last month.
In September, Infosys Head of BPO sales in Australia Kartik Jayaraman and BPO Head Latin America Humberto Andrade had quit the company. A month earlier, its Vice President and Financial Services Head for the Americas Sudhir Chaturvedi quit.
The top level exit also comes amidst organisational restructuring that company Executive Chairman N R Narayana Murthy is overseeing after returning to revive the sagging fortunes of the company in June.
Murthy, 67, has been making a series of changes at Infosys, including cutting costs at on-site work locations, and shifting focus to winning large outsourcing projects.