Infosys shares rallied over 3.5 per cent on Thursday after India's second biggest IT outsourcer named Vishal Sikka as the new CEO. Analysts had said the company would benefit from swiftly appointing a new CEO. (Read the full story here)
(Also read: Who is Vishal Sikka)
Infosys was the top gainer on the 50-share Nifty in early trade. However, the stock witnessed profit taking and slipped around 2 per cent as of 10.45 a.m. Infosys shares had closed with 3.6 per cent gains on Wednesday.
Infosys has underperformed its larger peers such as TCS over the last several quarters as the company struggled to grow in a changing environment. Infosys also lost market shares to its rivals over the past few years.
The subdued performance was a big overhang on Infosys shares, which fell over 3 per cent in last three months as compared to over 1 per cent gain in the broader CNX IT index. (Track shares)
Gaurang Shah of Geojit BNP Paribas told NDTV that Dr Sikka's appointment will remove short and long term uncertainty that has been a part of Infosys.
"We don't expect miracles to happen, but will advise investors to buy the stock," Mr Shah said.
Geojit BNP Paribas recently cut its target price on Infosys from Rs 4,050 to Rs 3,850.
Raamdeo Agarwal of Motilal Oswal told NDTV that the appointment of Dr Sikka as the new CEO is good news and will lead to more clarity on the entire transition issue.
"He is not homegrown so it will be a completely new experiment... For it to bear fruit, you will have to give it some time," Mr Agarwal said.