IT stocks fall after Cognizant cuts revenue guidance
Mumbai: Shares of IT companies lost close to 2 per cent today after the US-based Cognizant lowered its full year revenue guidance to at least 14 per cent, from 16.5 per cent earlier, indicating that the sector may face some challenges ahead.
Infosys’ scrip ended the day 1.68 per cent lower, while TCS was down 1.56 per cent on the BSE. Intra-day, they had fallen as much as 2 per cent.
Infosys was the worst performer among the 30 blue-chips that make up the BSE index, Sensex, followed by TCS.
Shares of HCL Tech were down 1.58 per cent.
Hexaware Tech and Wipro however, managed to end in the green, up 0.60 per cent and 0.26 per cent respectively.
Led by the fall in key IT scrips, the BSE IT index lost 1.27 per cent to end at 9,768.39.
The US and European markets provide more than 85 per cent revenues for Indian IT services firms.
Cognizant, which has a big presence in India, had yesterday reported a healthy 24 per cent jump in net profit at USD 371.9 million for the quarter ended June 30, but struck a cautious note as it lowered the full year revenue guidance.
“Due to weakness at certain clients and longer than anticipated sales cycles for certain large integrated deals, we are adopting a more conservative stance for the remainder of the year and revising our 2014 revenue guidance to growth of at least 14 per cent over the prior year,” Cognizant CEO Francisco D’Souza had said.
The New Jersey-based firm also expanded its stock repurchase programme by USD 500 million to USD 2 billion.
In India, it has global delivery centres in Mumbai, Bangalore, Chennai, Coimbatore, Gurgaon, Hyderabad, Kerala, Kolkata and Pune.
Overall, the company’s revenue for the second quarter of 2014 rose by 16.5 per cent to USD 2.52 billion, from USD 2.16 billion a year ago.