Analysts give thumbs up to Salil Parekh

Most brokerages are viewing Parekh's appointment as CEO and MD of Infosys as a positive development

Analysts expect Salil Parekh to hit the ground running as his work profile at Capgemini will largely match that in Infosys.

Credit Suisse 

Maintains neutral; Price target (PT) Rs 1,000
 

• Appointment is probably the best outcome for Infosys given his background in consulting, financial services and North America 
• Parekh can fulfill need to invest in new areas and preserve existing culture
• Need to wait to see if there will be key personnel changes, though risk would be same irrespective of CEO choice

PhillipCapital 

Maintains buy; PT Rs 1,060
 

• Incrementally positive; removes “overhang and ambiguity”
• With three decades' experience in IT services industry, Parekh is expected to handle the operations/work culture better than (Vishal) Sikka

Nomura 

Maintain reduce; PT Rs 875
 

• CEO appointment was faster than expected
• While it reduces succession uncertainty, clarity on strategy still needed
• Fundamental concerns of slowing growth, management attrition, traditional margin levers still continue and clarity will take time
• Watch for trends in attrition, approach to software and platform-based strategy, whether Nandan Nilekani’s association as non-executive chairman will continue
• Expect US dollar revenue/EPS CAGRs of 6 per cent/4 per cent over FY17-19

JM Financial 

Maintains buy; PT Rs 1,110
 

• Selection suggests a preference for tried-and-tested over experimental and execution over conception
• Transition should be smooth and quick; Parekh’s portfolio at Capgemini overlaps squarely with Infosys
• Meaningful re-rating for the stock would await a formal articulation of priorities by the new CEO