Infy CEO Shibulal seeks early retirement; exit may not impact stock: analysts

MUMBAI: Shibulal has expressed his desire to retire as the CEO and MD of Infosys, the company informed stock exchanges today.

The stock slipped to 3,165 after the announcement, but recovered in later trade.

Analysts say the development is nothing to worry about; and instead the Street will be more focused on Q4 results next week and company guidance for FY15.

“Nothing to worry about over this development as far as Infosys stock is concerned. The development does come as a suprise, but the only surprise is that he is quitting ahead of schedule; otherwise he was quitting anyway. Effectively, BG Srinivas and UB Praveen Rao had been heading the leadership roles and Shibu was there to overlook them,” said Ashish Chopra, IT analyst, Motilal Oswal.

Infosys will be announcing its fourth quarter results next Tuesday. The company is likely to report marginal decline in revenues in Q4.

Pramod Gubbi, VP, Institutional Equities, Ambit Capital, in an interview to ET Now said he expects Infosys to guide FY15 revenue growth at 7-9 per cent and margins to increase by 18 bps in Q4.

There have been many high-level exits in Infosys after its founder NR Narayana Murthy came out of retirement to oversee operations as Executive Chairman in June 2013.

He had told the in annual general meeting that it would take around three years to re-build Infosys, and that the process would involve some tough decisions.

In January 2014, Infosys raised two senior executives BG Srinivas and UB Pravin Rao to the post of Presidents and dismantled its expanded executive council.

The nominations committee will now short-list and evaluate an internal slate of candidates with the assistance of Development Dimensions International (DDI), a company specialising in corporate execuite evaluations.

The board has appointed Egon Zehnder, an executive search firm, to assist the Nominnations Committee in identifying an external slate of candidates.

Murthy had said last month that he is not 'very happy' with Infosys' performance over the last two years. "We could have done a better job in executing Infosys 3.0 strategy," Murthy had said in March.

However, Murthy had expressed hope that the first quarter of the next financial year would yield better results. He emphasised that the tech major is improving the quality of its hiring. "We are bringing better focus on meritocracy," he had said.