Infosys misses profit estimates and then loses Mohandas Pai from it’s board.
Infosys Technologies Ltd. (INFO), India’s No. 2 software exporter, plunged the most in almost two years in Mumbai after forecasting sales that lagged behind analysts’ estimates and fourth-quarter profit that missed expectations.
The shares had their biggest intraday drop since May 19, 2009, after the Bangalore, India-based company said sales in the year that began this month would be in the range of $7.13 billion to $7.25 billion. The average of 43 analysts’ estimates was for 341.4 billion rupees ($7.7 billion).
During the past few quarters, Infosys' telecom, large deals group and computer infrastructure management units have lagged peers, raising questions about whether the company should continue to have its top leaders handle more than one portfolio.
For instance, while Ashok Vemuri manages the banking, financial services and insurance business unit and the large deals group, Prasad Thrikutam heads energy utilities and system integration businesses. Another executive council member Subhash Dhar is heading both telecom business and global sales at Infosys.
"It's less to do with individual leaders and more about the structure itself. The company needs to either combine smaller units into one or let its best leaders focus on the most important areas," said a person familiar with restructuring talks at the company.