India's Tech Mahindra soars 10% as Infosys veteran to join as CEO
BENGALURU (Reuters) - Shares of Tech Mahindra Ltd surged nearly 10% on Monday after the Indian information technology services firm appointed Infosys Ltd veteran Mohit Joshi as its new managing director and chief executive officer.
Joshi has been with rival Infosys for 22 years, and is currently the president at the company. He will take charge of the IT arm of Mahindra Group from Dec. 20 for five years, the company said in an exchange filing over the weekend.
He will be succeeding CP Gurnani whose term is set to end on Dec. 19.
Joshi's resignation from Infosys is the second high-profile departure from the company following that of Ravi Kumar who resigned as its president in October.
At Infosys, Joshi would be on leave from March 11 with the last day with the company being June 9, according to a regulatory filing.
At its highest on Monday, Tech Mahindra's stock registered its biggest intraday jump in nearly three years and is the top gainer on the benchmark Nifty IT index, which is up 0.75%, as of 09:47 a.m. IST.
Shares of Tech Mahindra were up 8.2% at 1,148.80 rupees, Infosys fell 1.1% to 1,455.05 rupees.
At least three brokerages indicated it is a welcome move for Tech Mahindra.
Joshi has positive credentials with leading sales, operations, and transformation for Infosys and has held executive responsibility for all significant deals across the company, according to ICICI Securities.
However, the brokerage continues to retain a "reduce" rating on Tech Mahindra, stating that the company has room to improve its digital capabilities and will need to invest in doing so to restart growth.
The current average rating of 39 analysts covering Tech Mahindra is "buy" and the median price target is 1,143 rupees, according to data from Refinitiv.
(Reporting by Yagnoseni Das in Bengaluru; Editing by Sherry Jacob-Phillips and Eileen Soreng)