Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
12,086.70114.9
Stock Analysis, IPO, Mutual Funds, Bonds & More

Ranga’s exit should not affect Infosys in medium to long term: Urmil Shah, IDBI Capital

“There should not be any change in the capital deployment strategy.”

ETMarkets.com|
Updated: Aug 20, 2018, 01.07 PM IST
0Comments
URMIL_SHAH
Infosys has demonstrated that it is a fantastic institution and they have managed the changes at the CEO level as well as other senior exits quite well, Urmil Shah, Research Analyst and Associate V-P, IDBI Capital, tells ET Now.

Edited excerpts:

What is your first reaction to Ranga’s exit from Infosys? Is this an indication of more bad news to come for Infosys?

I would not take it as an indication for bad news for Infy but definitely it is a short-term negative for the company and also for the stock. Ranga has been instrumental in making sure that the financial performance, especially the margin profile and also on capital allocation, remains quite good in the last few years, when there has been a lot of changes at the CEO level.

To that extent, it is definitely negative in the short term. But Infosys has demonstrated that it is a fantastic institution and they have managed the changes at the CEO level as well as other senior exits quite well. We believe it should not have a material impact on the medium to long-term performance.

What could be the extent of damage because right now the tide seems to be favouring the entire IT pack, given the strong currency tailwind . Could it at best be just a very shallow impact on the stock price?

Yes, I would agree. It should be a shallow and a short-term impact on the stock.

Do you also see this as a glass half full? Do you think that with Mr Ranganath stepping down, way is cleared for new blood under the leadership of Mr Parekh given the fact that it is typically how the transitions play out?

Some kind of exits are possible because the way in which a new CEO wants to take the company forward might be different from what has been done in the past. That happens in case of any new CEO coming in and for any company, not just Infy. But more importantly, we need to keep in mind that there should not be any change in the capital deployment strategy which for now we believe there would not be any change because that has been one lead assurance that Ranga has built in the last few years.

Also Read

IDBI Capital maintains buy on VIP Industries, target price Rs 574

TCS results a miss on all parameters: Urmil Shah, IDBI Capital

IDBI Capital upgrades Sadbhav Engineering to buy, target price Rs 170

No evidence from whistleblower reduces probability of lapse at Infosys: Urmil Shah, IDBI Capital

Buy Avenue Supermarts, target Rs 1,604: IDBI Capital

Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service