December 5, 2012 / 6:02 AM / 5 years ago

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.

Indian employees at a call centre provide service support to international customers, in Bangalore March 17, 2004. REUTERS/Sherwin Crasto/Files

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.

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below