Analysts give thumbs up to Salil Parekh

Published On: 04, Dec 2017 | Source: business-standard.com

Analysts expect to hit the ground running as his work profile at will largely match that in

Credit Suisse 

Maintains neutral; Price target (PT) Rs 1,000
  • Appointment is probably the best outcome for given his background in consulting, financial services and North America 
  • 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, 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 overlaps squarely with Infosys
  • Meaningful re-rating for the stock would await a formal articulation of priorities by the new CEO