Sensex heavyweight Infosys has regained its position among the top-five companies in terms of market capitalisation (m-cap) in August. The IT bellwether snatched the fifth spot from Coal India as its market value rose 4% to Rs 1.78 lakh crore in August, while the miner saw its value dip 11% to Rs 1.58 lakh crore.
Infosys, however, is still a mile away its rival, TCS, which boasts of m-cap of Rs 3.81 lakh crore and is the country's largest listed entity. Apart from TCS, Reliance Industries, ITC and ONGC are placed above Infosys with higher market capitalisation.
According to experts, Coal India fell behind in the recent past as government’s divestment plans put the counter under pressure. On the other hand, Bangalore-based Infosys has seen significant investor interest on account of the fall in rupee. Technology firms earn a large portion of their income in dollars and any appreciation in the US currency boosts their earnings.
The software major has also seen a major shake up in its top brass in recent days after disappointing earnings growth shook investor confidence. In June, Narayana Murthy returned once again to take charge of the company and, since then, the stock has climbed more than 30%. However, the recent departure of Ashok Vemuri has got a section of the market worried.
“The loss of senior business heads in the strongest market and an inferior positioning in key growth market — Continental Europe — increase the hurdles before management in its quest for revenue growth revival,” stated a recent note by Deutsche Bank.
“While a weaker rupee can help Infosys to price its services competitively in order to win back market share, the continuation of senior management exits can blunt the effectiveness of these measures,” it added. On Friday, shares of Infosys lost marginal ground to close at R 3,100.30.
Shares of Infosys gained nearly 4.5% in August, while in the current calendar year, the shares have surged by more than 33%. Technology stocks have managed to outperform the markets owing to the sharp correction in the rupee. The BSE IT Index has gained more than 41% in year-to-date period compared to the Sensex’s 5% fall.