agencies
In past two days, the stock of information technology (IT) bellwether was down 4 per cent after the company on Saturday informed to the stock exchanges that Mohit Joshi, president of the company has resigned effective March 11, 2023.
Mohit Joshi will be on leave thereafter and his last date for the company would be June 9, 2023, Infosys said in an exchange filing. This is second large exit from the company in 3 months.
ICICI Securities believe that considering multiple responsibilities that Mohit was handling, the brokerage firm can't rule out near term vulnerability especially in BFSI, products space as well as large deal space.
“However we do not see long term implications of this event considering second tier leadership already in place at the company,” ICICI Securities said in a note.
Mohit Joshi has been appointed as President in August 2016 and his primary responsibilities includes P&L responsibility of Financial services, insurance, Healthcare & Lifesciences vertical (together more than $6.5 billion annual revenue for Infosys (36 per cent of revenue mix); Software products & Platforms business including Financle, cobalt, Finacle etc (revenue mix not disclosed by the company but could be $1bn+ in ICICI Securities view); Sales operations and Large deals etc.
Meanwhile, in past one month, the stock has slipped 11 per cent after the closure of open market buyback offer.
In comparison, the S&P BSE Sensex was down 5 per cent during the same period.
According to exchange data, Infosys had bought back 60.4 million shares or 1.44 per cent of the total equity capital at an average of Rs 1,539 apiece.
The average buyback price was 16.6 per cent below the maximum offer price of Rs 1,850.
In past one year, Infosys has underperformed the market by falling 25 per cent, as against 2.6 per cent rise in the S&P BSE Sensex.
Analysts at Nirmal Bang Securities believe there is a lot of divergence in views on FY24.
“We are assuming a low-mid single-digit growth from both lower volume as well as some price compression whereas consensus is building in a high single digit growth implying a soft landing in the US,” the brokerage firm said in December quarter result update.
“We believe consensus is underestimating growth and margin risks in FY24.
“While digital technology (DT) services will continue to remain a key theme for the next several years, we believe that ‘willingness-to-spend' will be constrained by ‘ability-to-spend' as enterprise customers battle earnings pressure from commodity and wage inflation, supply chain challenges, reduced consumer spending power, higher interest rates and likely below-trend growth in western developed economies,” analysts said in January report.
