Vishal Sikka has been appointed the new CEO of Infosys. It is the first time the company has not selected one of its founders for the role.
Sikka will take over from S D Shibulal, one of the engineers who founded Infosys. Executive Chairman Narayana Murthy and Executive Vice Chairman S Gopalakrishnan would also step down. Murthy was brought in from retirement to boost the company's prospects as it battled to regain lost ground from rivals and faced the exit of key employees.
Investors would be relieved that the hunt for a CEO has finally ended and one with credentials has been selected. Sikka has a PhD in computer science from Stanford University and was an executive board member at German software giant SAP.
Yesterday, the stock closed at Rs 3,166.60. Morningstar analysts Peter Wahlstrom and Andrew Lange have given it a fair value estimate of Rs 3,700. Below is their take on the stock. To read in more detail click here.
- Overall, Infosys will remain a relevant IT services provider. The company continues to develop its new and emerging businesses in cloud, Big Data, and mobility, which gives us confidence. In fact, it signed 20 new deals for cloud and Big Data and 15 new deals for mobility offerings during the quarter.
- With the market being highly competitive, employee retention will be a focal issue going forward. The company has gone some way toward improving attrition with better compensation and hiring practices, yet it is too early to tell how effective this has been.
- Overall, we believe that Infosys' stewardship of shareholder capital is standard.
- Our fair value estimate is Rs 3,700 per share.
- Infosys' narrow moat stems from its scale, comprehensive service portfolio, and strong network of clients.
