Infosys shares jump 3% as expected; CLSA calls ‘buy’ on appointing Salil Parekh as new CEO

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Published: December 4, 2017 10:56:24 AM

Reposing faith in the appointment of Salil S Parekh as new MD and CEO of India’s leading IT firm Infosys, global brokerage house CLSA has given a thumbs up to the company’s stock.

Infosys, new Infosys centre, Infosys in Rhode Island, Rhode Island, Infosys in Rhode Island, 500 local workers, Infosys to hire local workers, Infosys hiring, Infosys centresCLSA report said that Parekh’s appointment is a promising choice as he brings tenured experience in running a large IT services business. (Image: Reuters)

Reposing faith in the appointment of Salil S Parekh as new MD and CEO of India’s leading IT firm Infosys, global brokerage house CLSA has given a thumbs up to the company’s stock. Infosys shares jumped 3 percent in the early trade. CLSA has given a ‘buy’ call on Infosys stock with a target price of Rs 1140 per share, implying an upside of nearly 19 percent from the market price of Rs 960. The IT stock has plunged by nearly 5 percent up till now this year. CLSA’s report said, “Parekh’s appointment is a promising choice as he brings tenured experience in running a large IT services business.” However, the global brokerage also cautioned the investors saying, “the company may face internal distractions over the next few quarters.”

India’s leading IT firm Infosys on Saturday named Salil S Parekh as its next chief executive officer and managing director. Parekh has been appointed for a five-year-term effective January 2. The company also said that its interim CEO Pravin Rao will be re-designated as the chief operating officer of the company from the same date. Parekh’s appointment was approved by the company’s board of directors The appointment was made on basis of recommendations of the Nomination and Remuneration Committee which concluded its global search for a CEO and MD, Infosys added.

Commenting on Parekh’s appointment Nandan Nilekani, the chairman of the Infosys board had said that the company was delighted to have Salil as the CEO & MD of Infosys. Parekh has more than three decades of global experience in the IT industry and has a strong track record of executing business turnarounds and managing acquisitions very successfully. The company board believes that Parekh is the right person to lead Infosys at this transformative time in the industry, Nilekani added. This latest development will bring an end to the uncertainty with the company after the resignation of lead Infosys at this transformative time in the industry.

Reacting to this appointment, Kiran Mazumdar-Shaw, Chairperson of the Nomination & Remuneration Committee said, that Parekh was selected after a comprehensive global search effort. She added that Sali Parekh was the top choice from a pool of highly qualified candidates. “With his strong track record and extensive experience, we believe, we have the right person to lead Infosys,” she said.

Parekh would be joining the company from Capgemini where he was a member of the group executive board. He completed his Master of Engineering degrees in Computer Science and Mechanical Engineering from University of Cornell, and a Bachelor of Technology in Aeronautical Engineering from the Indian Institute of Technology, Bombay. Infosys had set a deadline of March 2018 to fill the vacancy after the resignation of former CEO Vishal Sikka.

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