Bourses cheered the return of Infosys founder Narayana Murthy assuming the executive role and the stock was up by 7 per cent (Rs. 171) to quote at Rs. 2579 at 9.50 am on Monday. Brokerages tracking the stock felt that the return of Mr. Narayana Murthy would boost investors’ confidence in the company.
Goldman Sachs however said it will wait and watch to see how Infosys changes its strategy to return to growth given the slower IT growth and competitive pressures in IT landscape. “We continue to believe that Infy’s earnings visibility will remain poor in the near term as it faces growth/margin trade-off amid modest IT spending.”
Morgan Stanley however maintains overweight rating on Infosys. Mr. Narayana Murthy’s leadership would likely improve execution at Infosys. But this could take 6-9 months to be reflected in financials, it said.
Deutsche Bank said, “Mr. Narayana Murthy’s second innings at Infosys will likely be a lot more challenging, particularly since (a) he has been away from the executive responsibilities of the company for the last seven years and (b) the company’s problems are structural rather than mere quarterly stumbles. (Mr.) Murthy’s return will boost employee morale and investor sentiment in the short term.”