Should you sell Infosys now that Sikka has quit?

No.

This is not the first case of corporate mis-governance nor is it the last. You should stick around with a company as long as the cash flow is happening. At a PE of 15 if you think Infosys is a good buy, you should buy. However if you think it is a good sell at a PE of 15, you should sell.

You should NOT ACT EMOTIONALLY and sell the shares. I remember one company where a senior manager had behaved badly with a woman – senior management person – reporting to the MD. He was a powerful man and close to the promoter. What happened? the woman left, the man continued. A very famous Sensex company.

The EPS continued and even now it is a very respectable and well run company. Nothing came out. The Chairman told me….’nothing will happen’. The incident is at least a couple of decades old. At least.

As a young man with black hair and being wet behind the ears I thought if there is some big corporate scam or even small cheating, or a womanising incident, it is your duty to bring it to the notice of the Chairman.

As an older person I realized that the Chairman is worried about :

a) how the F….did Subra find out about it

b) how much damage can Subra cause to ME or my group by talking/ writing about it

c) who can convince Subra that it does not matter

That is all.

How to hide it, and how to use it against the person against whom we have evidence is the next thing that they look out for. So Subra was a great toilet paper, but obviously once the cleaning job is done, it has to be thrown out. Right?

So the Board of the Venerable Infosys will not do damage control (rs. 225,000 crores needs to be protected), then they will look for a pliable CEO acceptable to the markets. Then wait for the story to go to page 8.

So the falling of price or not following of price is NOT A function of Corporate Governance. It is a question of EPS and get a nice PE ratio. Not all of them can hold on to EPS, PE and respect in the market.

Infosys was over exaggerated!

I knew it from some other “bored” members and many vendors!!

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  1. nicely said. while others were selling, i got a good retail buy today and in addition to it made money by buying “put” of the company.

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