IT stocks fall up to 5% on Cognizant weak guidance

IT stocks today fell by up to 5 per cent as Cognizant expects to grow at 9.9-14.3 per cent for the entire 2016, which is lower than 21 per cent growth it clocked in 2015.
Shares of TCS fell by 4.7 per cent, Infosys was down 4.79 per cent and Wipro lost 2.24 per cent.
Among others, HCL Tech slipped 5.21 per cent and Tech Mahindra dipped by 4.81 per cent on BSE.
The US-based IT services firm Cognizant yesterday posted a 16.7 per cent rise in net profit at USD 423.4 million for the December quarter, from USD 362.9 million a year ago, helped by growth in healthcare and North America and Rest of World (RoW) geographies.

The company, which has a large part of its workforce based in India, met its revenue guidance at USD 3.23 billion in the said quarter, up 17.9 per cent from USD 2.74 billion in October-December of 2014.
However, the management expects negligible change in January-March of 2016 from the preceding quarter and has forecast revenues to be in the range of USD 3.18-3.24 billion.
For the entire 2016, Cognizant expects to grow at 9.9-14.3 per cent, translating into a revenue of USD 13.65-14.20 billion.
While this was in line with Indian IT industry body Nasscom's estimate of 10-12 per cent growth for 2016-17, it is lower than its own 21 per cent growth it clocked in 2015.