Speaking to CNBC-TV18, Girish Pai, Head of Research at Nirmal Bang Institutional Equities, said it was clear that there is still friction between the Infosys board and the company's founders.
The Infosys management held an elaborate press conference Monday evening, outlining its stance on governance issues raised by the company's co-founders.
But going by statements put out by the company top brass and the response by founders, there is an indication the issue is not likely to achieve closure, said Girish Pai, Head of Research at Nirmal Bang Institutional Equities.
Speaking to CNBC-TV18, Pai said that it was clear that the friction between the board and the founders remains after Chief Executive Officer Vishal Sikka said on Monday that he was a "kshatriya warrior" and would "stay and fight".
At a press conference, Infosys Chairman R Seshasayee defended Sikka's annual salary of USD 11 million and the hefty severance payout to former Chief Financial Officer Rajiv Bansal - both of which had been questioned by the founders in a letter to the board last month.
Pai said that founder and former Infosys chief NR Narayana Murthy had changed his stance in a matter of hours on Monday, first saying the row was over and later insisting that his concerns remain. "This he means he expects some sort of action, possibly a restructuring of the board," said Pai.
Earlier in the day, former Chief Financial Officer Mohandas Pai said that the probe into the payout needed to be made public.
But Girish Pai said that things instead of cooling off, the situation could potentially deteriorate and the founders could end up voting out or expressing lack of confidence in the board.
Interestingly, Infosys stock seems completely unnerved by the goings-on.
Moshe Katri, Managing Director of Wedbush Securities, said that there had been broad-based buying in the company's shares in the last three to four days mainly because of expectations of an increase in IT spending and the realisation that the proposed curbs on H1B visas in the US might take longer than expected.
He said the stock's performance could be affected if the current conflict turns disruptive.
Pai said the conflict should be resolved as quickly possible, otherwise it could distract the management, which in turn could affect the performance of the company.
He said current buying could be linked to Infosys' lofty goals, which he said should be made more "modest".