Brokerages continue to recommend stocks of Infosys

The turmoil at Infosys with regards to differences of opinion between the founders and the current board seems to be ongoing but analysts as well as brokerages seem to be unperturbed and continue to recommend the stock.

 “We strongly believe that corporate governance is a cornerstone of any organisation and has been the key pillar for a stellar rise of the company, and hence we strongly believe that the company should continue to deliver industry lead performance, driven on ethical ground. We maintain our buy recommendation on the stock with price target of Rs 1,249,” Angel Broking Vice President (Research-IT) Sarabjit Kour Nangra said.

“We have had a buy on Infosys since Rs 920-930 levels. This recent thing is more of a rhetoric and there is no substance to it. The sore point in the whole issue is the cash on the balance sheet and I am sure that things will be amicably resolved due to which I still recommend a buy on the stock,” IIFL vice president, markets and corporate affairs, Sanjiv Bhasin said.

Infosys founder N R Narayana Murthy along with some of the other founders have been raising concerns about corporate governance issues in the company including the high severance pay to former chief financial officer Rajiv Bansal and the revision in pay to CEO Vishal Sikka.

Brokerage firm Motilal Oswal believes that Infosys is investing in all the right areas and so that company remains its preferred pick in the information technology sector.
“We believe that the company is investing in all the right areas to regain and sustain its growth leadership, compounded by industry-leading margins. Our target price of Rs 1,250 implies a 28% upside. Infosys remains our preferred play in the sector,” Motilal Oswal Financial Services said in a note post the press conference by Infosys board Chairman R Seshasayee along with CEO Vishal Sikka, COO Pravin Rao, and some independent directors.