Infosys falls on Bala's exit; analysts divided on exodus of senior executives - NDTV

Infosys shares started lower on Monday, reacting negatively to the resignation of director V. Balakrishnan, who was seen as a candidate to become the next chief executive of India's second biggest outsourcer.

Mr Balakrishnan is the eighth senior executive to resign from Infosys since co-founder Narayana Murthy returned as executive chairman in June 2013. (Read the full story here)

Infosys shares were down in a positive market and the stock underperformed the broader IT benchmark. As of 09.20 a.m., Infosys shares traded 0.5 per cent lower at Rs 3,535 as against a 0.3 per cent gain in the BSE IT index. (Track stock)

The departure of Mr Balakrishnan sparked concern among some analysts of management disarray in a company.

Domestic brokerage Kotak said Mr Balakrishnan's resignation shows the inability of Infosys to retain core team members. The impact of exits could be felt in the medium term, the brokerage said, adding that returns in the stock could be capped in the near term.

Mr Murthy's return has been applauded by investors, with the share price rising about 50 per cent so far this year to a record high, as its profit outlook is expected to improve on the back of stronger global demand and a weak rupee. However, his return has also been followed by the departure of several executives, including its Americas head and global manufacturing chief, Ashok Vemuri.

Mr Balakrishnan has the highest profile among those to leave, having previ ously served as chief financial officer and heading key units at the company, including consultancy Infosys Lodestone.

Analysts were uncertain about the reasons behind the departures, but said it was bound to worry investors.

Edelweiss, which continues to maintain a positive stance on Infosys, said the exit of key members can have negative implications in near term.

However, Barclays said investors should buy the stock on weakness. The investment bank said it had expected these exits and continues to expect some more.

via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNE2CXfjx3TbmTA_o0fO_uqZJDLGDg&url=http://profit.ndtv.com/news/market/article-infosys-falls-on-balas-exit-analysts-divided-on-exodus-of-senior-executives-375594

Put the internet to work for you.

via Personal Recipe 2910127