Why investors are doubting Infosys, rather than giving it the benefit of doubt

The whistleblower compliant was sent to the company’s board on 20 September. Still, the board has no adequate response after a month has passed.
If there is some element of truth to the claim about withholding information from the company’s board, it will create a huge wall of mistrust between the top management and the board.

Some large investors may give Infosys the benefit of doubt, and brush off the allegations of a low-margin or a no-margin deal with a client as purely a business decision.

Apart from Tata Consultancy Services Ltd, Infosys is the only other IT services stock that trades at relatively high valuations of over 20 times earnings.
In order to ensure the whistleblower complaint doesn’t deal a major blow to this perception, the company’s board should act quickly in addressing investors’ concerns.

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