Bangalore: Infosys’ announcement of V Balakrishnan’s exit had an adverse effect on India’s second largest service provider’s stocks, which went down by as much as 2.1 percent. This is the eighth high profile exit from Infosys in the last six months, reports The Economic Times. Interestingly, these exits are coming in the middle of a major organizational restructuring which Mr. Narayana Murthy himself is overseeing in the hopes of reviving the company’s falling fortunes.

 “This perhaps indicates that the internal challenges are significantly higher than our initial assessment. We believe that the impact of exits could be felt in the medium term.”, says a Kotak Institutional Equities note. They also believe returns in this stock may be limited, after a strong recent performance.

Prior to this decline though, the stocks were trading well over three year highs; Infosys also became the sixth Indian company to cross the 2 lakh-crore market capitalization last week.

However, analysts are not expecting these exits to have an impact on the performance of the company, but they do see the stocks fluctuating during this period until the situation is stabilized. They also added that, investors have nothing to worry about from these marginal stock corrections as long as the long term story for Infosys is still intact.

“Though the impact of top management resignations at Infosys will not immediately make an impact to the topline of Infosys, however, it may have some effect over a medium-term.”, said Ankita Somani, a research analyst at Angel Broking who has a ‘neutral’ rating on the stock. She also added these exits are a concern for the company and expects Infosys’s stock to see some corrections in the coming days.

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