Today in New Delhi, India
May 22, 2019-Wednesday
New Delhi
  • Humidity
  • Wind

Infosys stock hot on Capgemini talk

The rumours of Infosys’ plans to acquire Capgemini propel its shares in the Paris Stock Exchange but the share of the software giant remains lacklustre, reports Vyas Mohan.

business Updated: Jun 30, 2007 02:02 IST
Vyas Mohan
Vyas Mohan
Hindustan Times

Even as rumours of Infosys’ plans to acquire Capgemini propelled shares of the Bangalore-based software giant in the Paris Stock Exchange, shares of Infosys remained lacklustre in the domestic market as worries of a stronger rupee eating into the profits of the bellwether dwarfed the development.

Further, analysts said that the market talk of acquisition has already been factored into the stock price of Infosys, which, oddly has been lagging index gains. “The market has already discounted the news and it has been factored into the stock price. However, though Infosys has got good cash reserves, investors are still apprehensive whether this is a viable proposition,” said Gaurang Shah, area manager for Maharashtra of Geojit Financial Services.

An Infosys spokeswoman denied the reports, while Capgemini officials declined comment. However, the talk of Infosys’ interest pushed Capgemini’s shares up by 3.7 per cent to close at 53.78 euros on Thursday. On Friday, shares of Infosys closed at Rs 1925.20 (up 1.10 per cent or Rs 3.30), after hitting an intra-day high and low of Rs 1,975 and Rs 1,922, respectively.

“The scrip looks bearish on the charts. The first quarter results are expected by July 10 and it may not be better than market expectations,” said the head of a domestic brokerage.

Analysts are of the view that Capgemini, which is Europe’s largest computer services company with a market capitalisation of $ 10 billion, will be quite a mouthful for Infosys to digest.

However, with around Rs 6,000 crore in cash reserves and invaluable goodwill, analysts say, it makes sense for Infosys to acquire Capgemini as the domestic company is looking at an opportunity to include consulting in its array of services.

First Published: Jun 29, 2007 23:19 IST