Stocks

Infosys slumps over 4% on Ranganath’s resignation

BL Internet Desk Aug 20 | Updated on August 20, 2018 Published on August 20, 2018

Shares of India's second largest software services exporter, Infosys Ltd, fell as much as 4.03 per cent to Rs 1,373.5, their biggest percentage loss since July 5.

After opening weak at Rs 1,388.70 against the previous close of Rs 1,431.35, the stock touched intraday high of Rs 1,408 and a low of Rs 1,373.55. In terms of equity volume, 2.64 lakh shares exchanged hands on the BSE.

The company shares ended the session down by 3.22 per cent at Rs 1,385.20 on the BSE. On the NSE, the stocks closed lower by 2.95 per cent at Rs 1,388.20.

Infosys has announced that the board of directors at its meeting on Saturday had accepted the resignation of M.D. Ranganath as the Chief Financial Officer and a key managerial personnel. Ranganath will continue in his current position as Chief Financial Officer till November 16, 2018. The board will immediately commence the search for the next Chief Financial Officer.

Ranganath's resignation comes exactly a year after former chief executive Vishal Sikka quit following a feud with founders.

“Concerns around exits from the senior management team will remain an overhang,” Morgan Stanley says. It has downgraded the stock to 'equal-weight' from 'overweight'.

“In the short-term, the market could react negatively, particularly given strong performance YTD. However, in the medium/long-term, we expect stock performance will depend on growth,” Citi says. The brokerage has given 'neutral' rating with a price target of Rs 1,315.

About 25 of 35 brokerages have rated the stock “buy” or higher, eight ”hold” and three “sell” or lower; their median price target is Rs 1,411. Up to Friday's close, Infosys stock had risen 41.2 per cent since August 17, after Vishal Sikka quit the company.

(With inputs from Reuters)

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Published on August 20, 2018
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