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Infosys Technologies Ltd. (INFY.BO) Rs2,905.95
Positive News Equity Research
Board changes remove uncertainty; reiterate Buy
News
Infosys Technologies (INFY) announced that its Board of Directors had
appointed Mr. N. R. Narayana Murthy as Chairman Emeritus, Mr. K. V.
Kamath as the Chairman, Mr. S. Gopalakrishnan (Kris) as the Co-Chairman
(from CEO) and Mr. S. D. Shibulal as CEO and MD (from COO). The
changes are effective from Aug. 21, 2011. Three more executive directors
will be appointed by the Board in the AGM to be held on June 11. The
position of COO is still under consideration. The board also proposed
changing the name of the company to Infosys Ltd.
Analysis
Appointment of Mr. Kamath, current non-executive chairman of ICICI Bank,
was not a surprise to us as he has been on the Board as an independent
director and was considered a leading contender for the job. Mr. Kamath is
widely considered a progressive leader and is well versed in technology.
He helped ICICI Bank build a strong retail franchise with greater focus on
top-line growth. We believe this bodes well for Infosys as it looks to
execute its new strategy. Appointment of Mr. Gopalakrishnan as executive
Co-Chairman, as well as Mr. Shibulal as the CEO and MD, indicate it should
be business as usual as both of have been in executive positions for a
number of years. As part of their new roles, the appointees said their first
priority would be to execute Infosys’ new strategy “Infosys 3.0”,
strengthen client partnerships and take the company more global.
Implications
We believe that with the declaration of Board changes, the uncertainty
surrounding the management restructuring is behind us. From here on we
think it will be business as usual for INFY with management increasing its
focus on executing the new strategy and the investors would bring their
focus back to the firm’s performance. We reiterate our Buy rating on the
stock and believe that Infosys is best positioned for growth among it
domestic peers, with industry-leading 24%/23% revenue and EPS CAGR
over FY11E-FY13E.
INVESTMENT LIST MEMBERSHIP
Asia Pacific Buy List
Coverage View: Neutral
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Infosys Technologies Ltd. (INFY.BO) Rs2,905.95
Positive News Equity Research
Board changes remove uncertainty; reiterate Buy
News
Infosys Technologies (INFY) announced that its Board of Directors had
appointed Mr. N. R. Narayana Murthy as Chairman Emeritus, Mr. K. V.
Kamath as the Chairman, Mr. S. Gopalakrishnan (Kris) as the Co-Chairman
(from CEO) and Mr. S. D. Shibulal as CEO and MD (from COO). The
changes are effective from Aug. 21, 2011. Three more executive directors
will be appointed by the Board in the AGM to be held on June 11. The
position of COO is still under consideration. The board also proposed
changing the name of the company to Infosys Ltd.
Analysis
Appointment of Mr. Kamath, current non-executive chairman of ICICI Bank,
was not a surprise to us as he has been on the Board as an independent
director and was considered a leading contender for the job. Mr. Kamath is
widely considered a progressive leader and is well versed in technology.
He helped ICICI Bank build a strong retail franchise with greater focus on
top-line growth. We believe this bodes well for Infosys as it looks to
execute its new strategy. Appointment of Mr. Gopalakrishnan as executive
Co-Chairman, as well as Mr. Shibulal as the CEO and MD, indicate it should
be business as usual as both of have been in executive positions for a
number of years. As part of their new roles, the appointees said their first
priority would be to execute Infosys’ new strategy “Infosys 3.0”,
strengthen client partnerships and take the company more global.
Implications
We believe that with the declaration of Board changes, the uncertainty
surrounding the management restructuring is behind us. From here on we
think it will be business as usual for INFY with management increasing its
focus on executing the new strategy and the investors would bring their
focus back to the firm’s performance. We reiterate our Buy rating on the
stock and believe that Infosys is best positioned for growth among it
domestic peers, with industry-leading 24%/23% revenue and EPS CAGR
over FY11E-FY13E.
INVESTMENT LIST MEMBERSHIP
Asia Pacific Buy List
Coverage View: Neutral
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