Jack Palmer case mildly positive for Infosys, visa issues weigh: brokerages

NEW DELHI: Infosys Ltd surged over 3 per cent in trade today after a US District Court dismissed all charges filed against the IT services major by one of its employees, Jack Palmer.

Brokerages are of the view that the outcome of the Palmer case may provide near-term upside to the stock as management can concentrate on the business now and clients, who were awaiting clarity on the case, can renew projects.

"The decision is a short-term positive for the stock, given the lack of a trial and the resulting potential for negative press coverage," Wells Fargo Securities said in a note.

"However, the issue remains unresolved, as we note that a grand jury investigation of Infosys' visa usage is still outstanding and a second whistleblower alleging similar visa misuse and retaliation by the company also remains," the report cautioned.

US District Judge Myron H Thompson found no basis to support any of the charges filed by Palmer under Alabama state law and dismissed the case entirely, ET Now reported.

While the judge said the threats against Palmer were "worrisome", he concluded that Palmer has no right to recover from Infosys under the current Alabama law.

“The event is mild sentiment positive for Infosys and the industry. However, the company continues to face the Department of Justice investigation on visa misuse,” JPMorgan said in a note.

JPMorgan retains a ‘neutral’ rating on the stock with a target price of Rs 2,600.

Infosys closed 2.3 per cent higher at Rs 2,407.05 on the Bombay Stock Exchange. It has hit an intraday high of Rs 2,438.75 and a low of Rs 2,362.