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With Sikka At Infosys Helm, Not Just Revenue, Share Prices Too Plunged

According to figures from Infosys website, Sikka’s quarterly performance was much below his predecessor CEOs who were all founders...

With Sikka At Infosys Helm, Not Just Revenue, Share Prices Too Plunged
With Sikka At Infosys Helm, Not Just Revenue, Share Prices Too Plunged
outlookindia.com
2017-02-21T11:19:33+0530

Infosys CEO Vishal Sikka’s tenure, it seems, has not just been marked by low single digit growth in revenues and net profit. The company has also seen its share price plunge in the months that Sikka has been in the chair.

To Sikka’s advantage, the company’s overall profits and revenue figures have increased, revenue from Rs 50,133 in FY14 to Rs 62,441 representing a 24 per cent increase, and Net profits from Rs 10,648 crore in FY 14 to Rs 13,491 crore in FY 16 showing a 26 per cent increase.

However according to figures from Infosys website, Sikka’s quarterly performance was much below his predecessor CEOs who were all founders, even those of Kris Gopalakrishnan and S. D. Shibulal whose tenures were not exactly golden years for Infosys.

Now it comes to light that Infosys share price in the market dropped drastically under Sikka’s tenure so far. According to BSE data, Infosys share price was at Rs 3,747.65 in September 2014 or soon after Sikka took over. It went up by 16 per cent to RS 4,359. 25 in November 2104. However after that it has never reached that level and has been constantly falling.

In December 2014, it saw a huge fall of 55 per cent and came down to Rs 1,971.20, rising marginally for the next three months before falling again. In June 2015, the Infosys stock price went down below the Rs 1000 mark to rest at Rs 985.35 for the first time in years. While it remained in the low Rs 1000 level for the next several months in 2015 and 2016, it started falling again since November 2016 when the stock price came down to Rs 975.45 and hitting its lowest level in years in January this year when it tanked to Rs 929.30. In February too, the recovery has been less than marginal and the share price has remained under Rs 1,000 closing at Rs 999.70 on February 17 and recovering slightly to Rs. 1011.70 today.

The stock performance of Infosys is partly due to market forces and external environment and global developments while partly it could be because of Sikka’s performance as CEO and the company’s indifferent quarterly results.

The next few quarters will be crucial for Sikka as the Indian industry gears up to face global challenges including that from the outcome of Brexit which will affect UK market, one of the largest for India and Donald Trump’s H1B policies which is likely to affect Infosys more as over 60 per cent of its revenues today come from the US market. But Sikka has time and the board and the founders confidence as of now which may allow him to bring something out of the hat to make things work better for Infosys in the coming months. The company’s 2 lakh employees and investors are eagerly looking forward to that.

 

 

 

Month

Close

 
 

Sep 14

3,747.65

 

Oct 14

4,051.45

 

Nov 14

4,359.25

 

Dec 14

1,971.20

 

Jan 15

2,142.75

 

Feb 15

2,294.85

 

Mar 15

2,216.60

 

Apr 15

1,942.40

 

May 15

2,022.40

 

Jun 15

985.35

 

Jul 15

1,078.05

 

Aug 15

1,095.20

 

Sep 15

1,160.45

 

Oct 15

1,136.05

 

Nov 15

1,088.45

 

Dec 15

1,104.55

 

Jan 16

1,164.85

 

Feb 16

1,083.75

 

Mar 16

1,217.95

 

Apr 16

1,210.85

 

May 16

1,249.85

 

Jun 16

1,170.75

 

Jul 16

1,073.95

 

Aug 16

1,036.80

 

Sep 16

1,038.10

 

Oct 16

1,002.50

 

Nov 16

975.45

 

Dec 16

1,010.70

 

Jan 17

929.30

 

Feb 17

999.70

 

 

 

 

 

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