IT stocks fall on Cognizant revenue guidance1 min read . Updated: 07 Aug 2014, 09:05 PM IST
Shares of top IT services providers TCS and Infosys fell 2% each in intra-day trade on BSE
Mumbai: Information technology (IT) stocks fell by as much as 3% on Thursday after Cognizant Technology Solutions Corp. lowered its full year revenue guidance to at least 14% from 16.5% earlier, indicating that the sector may face some challenges ahead.
In intra-day trade, shares of top IT services providers Tata Consultancy Services Ltd (TCS) and Infosys Ltd fell by 2% on BSE. Wipro Ltd lost 2.87%, HCL Technologies Ltd went down by 2.27%, while Hexaware Technologies Ltd declined 1.27%.
Cognizant had on Wednesday reported a healthy 24% jump in net profit at $371.9 million for the quarter ended 30 June, 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% over the prior year," Cognizant CEO Francisco D’Souza had said.
The New Jersey-based firm, which has big operations in India, also expanded its stock repurchase programme by $500 million to $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% to $2.52 billion, from $2.16 billion a year ago.
At close, TCS fell 1.56% to ₹ 2,470.20, Infosys shed 1.68% to ₹ 3,514.55, Wipro rose 0.26% to ₹ 552.75, HCL Technologies declined 1.58% to ₹ 1,520.75, while Hexaware Technologies added 0.60% to ₹ 141.90.
The benchmark S&P BSE Sensex ended 0.30% lower at 25,589.01 points.