IT shares hit on Cognizant SEC filing
Reuters Market Eye - Indian IT shares down on fears that Cognizant Technology Solutions Corp may issue a lower revenue growth guidance for 2013 based on compensation targets for top executives, dealers said.
Cognizant, in a filing to the SEC on Tuesday, said its top executives will receive 100 percent of their performance-linked shares if the company achieves revenue of $8.5 billion next year, a 16 percent rise over its projected 2012 revenue.
The rise would be lower than the 20 percent growth, equivalent to revenue of $7.34 billion, projected by the company in 2012.
Dealers say Cognizant's earnings outlook is a bellwether for the earnings of other Indian IT firms.
Sentiment was also dampened by Cowen's downgrade of Infosys Ltd(INFY.NS) to 'neutral' on Tuesday due to fears of a protracted revenue growth recovery.
"This is just a knee-jerk reaction. With the rupee at 55 levels, the third-quarter earnings cannot be bad for the IT sector," said Kishore Ostwal, chairman of CNI Research, expecting technology stocks to bounce back.
Infosys down 2 percent, Wipro Ltd (WIPR.NS) 1.9 percent lower, Tata Consultancy Services (TCS.NS) 0.6 percent down, against the broader BSE index, which is up 0.2 percent.
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