Infosys recovers after 4% drop in early trade as CFO Ranganath quits

FILE PHOTO: The logo of Infosys is pictured inside the company's headquarters in Bengaluru | Photo: Reuters
Shares of Infosys was trading 2% lower at Rs 1,401, after falling 4% in early morning trade on the BSE, after the company’s chief financial officer (CFO), M D Ranganath, has decided to leave the IT major to pursue external opportunities.

Infosys recovered 2.2% from its early morning low of Rs 1,374. In comparison, the S&P BSE Sensex was up 0.75% or 286 points at 38,234. The trading volumes on the counter nearly doubled with a combined 2.57 million equity shares changed hands on the NSE and BSE so far.

In a release on Saturday, Infosys said that the board of directors has accepted the resignation of M. D. Ranganath as the chief financial officer and key managerial personnel of the Company.

The board will immediately commence the search for the next CFO. The company also said that Ranganath will continue in his current position till November 16, which will ensure smooth transitioning of role to his successor.

Infosys has outperformed the market by gaining 19% in the past three months, despite today’s fall. In comparison, the S&P BSE Sensex was up 10% during the same period.  In the past six months (up 24%) and one year (up 52%) too, the stock outpaces the index which gained 13% and 21%, respectively, during the period.

“The rally hardly leaves stomach for news of continued rebuilding of the top leadership and the ensuing distraction to business. Hence we would expect the stock to lose some of the steam that had built up in the recent past,” Motilal Oswal Securities said in a note. The brokerage firm has a Buy rating on the stock with price Target of Rs 1,600 discounts forward earnings by 17x.