IT shares extend fall on outlook worries
Reuters Market Eye - Indian technology shares fall for a second day, with Cognizant's SEC filing clouding revenue outlook for the sector.
Cognizant Technology Solutions Corp (CTSH.O), 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 filing implies that CY13 growth would be lower than the company's outlook for CY12.
"Based on historical trends, Cognizant's annual guidance corresponds with revenue growth corresponding to 100 percent of performance units," IDFC said in a note.
Barclays Capital, however, feels that while Cognizant may see a slowdown, it does not pose an incremental risk to Barclays' FY14 growth forecasts of 15 percent for TCS and 13 percent for HCL Tech.
"Cognizant's growth premium to Indian IT vendors has diminished in the past two years due to its larger revenue and growth base," Barclays Capital said in a note.
An additional negative may come from the rupee. Credit Agricole believes the government winning the vote on foreign direct investment in multi-brand retail will continue to help rupee. It expects the rupee could rise to 52 per dollar by end 2013.
Infosys Ltd (INFY.NS) down 2.4 percent, Tata Consultancy Services (TCS.NS) is down 2 percent, while HCL Technology is down 2.1 percent.
- Tweet this
- Share this
- Digg this
- Bangalore-bound Malaysian plane lands safely after landing gear scare
- Bangalore-bound Malaysia Airlines plane turns back after tyre burst on takeoff
- India passes halfway mark in election with BJP gaining strength
- Supreme Court allows iron ore mining in Goa with upper limit of 20 million tonnes
- Rupee sees worst single-day fall in over a month
Iron Ore Mining
The Supreme Court lifted a 19-month old ban on mining in Goa, the top iron ore-exporting state, on Monday, a move that will put more pressure on global prices although it capped annual output in the state at 20 million tonnes. Full Article | Quote
Bangalore-bound Malaysia Airlines plane turns back after tyre burst on takeoff Full Article