'Murthy's return will spark short-term rally in Infy stock as challenges galore'

Indian IT bellwether Infosys today appointed its co-founder and chairman emeritus NR Narayana Murthy as executive chairman and additional director on its board.

According to Bhavin Shah, MD at Equirus Securities, the market had expected such a move, so Narayana Murthy’s return to Infosys may spark some positive reaction by the D-Street on Monday, but a lot of work needs to be done to turnaround the company.

Infosys stock has recovered a bit after hitting a low post dismal fourth quarter earnings. The stock may see an uptick of about 3-4 percent or may be larger, on Monday, but that would not be warranted as challenges facing Infosys are fairly significant , he said in an interview to CNBC-TV18.

“The biggest issue that Infosys has faced last few years has been the employee attrition and loss of lot of senior technical people over last several years and that has affected the company’s ability to deliver on projects in the marketplace and also to win new projects,” he added.

The decision to bring Murthy back into executive leadership as chairman was taken by the board at an emergent meeting earlier in the day.

“This calling was sudden, unexpected, and most unusual. But, then, Infosys is my middle child. Therefore, I have put aside my plans-in-progress and accepted this responsibility,” Murthy said in the statement.