Market experts are upbeat on the domestic IT companies post the first quarterly numbers of Cognizant Technology Solutions, an American multinational corporation that provides custom information technology, consulting and business process outsourcing services.
For the first quarter ended March 31, Cognizant reported a 20 per cent and 9.7 per cent year-on-year rise in quarterly revenue and profit figures, respectively, helped by higher spending by healthcare and financial services clients in North America. The company also raised its top line growth prediction for 2015, to 19.3 per cent in constant currency terms from 19 per cent given in February, and predicted a 3.4 per cent sequential increase in April-June revenue.
“Sentiments for domestic information technology companies will improve post Cognizant quarterly numbers,” said Alex Mathews, head of research, Geojit BNP Paribas Financial Services.
Shares of Tata Consultancy Services and Wipro were trading 1.79 per cent and 0.58 per cent higher, respectively, in noon trade on the Bombay Stock Exchange on Tuesday. Infosys and Tech Mahindra shares were, however, trading 1.02 per cent and 0.58 per cent lower, respectively, at the same time.
“We can see some short term impact of Cognizant result on the IT sector. We believe the sector is likely to register 10 per cent to 12 per cent revenue and profit growth in the ongoing quarter. Investor can buy Infosys, TCS and HCL Tech shares on correction for long term gains,” independent market expert Ambareesh Baliga told businesstoday.in.
In the past 13 trading sessions, S&P BSE IT index tanked 1,086 points, or 9.30 per cent, to 10,585.87 on May 4. The index was at 11,672.30 on April 13. During the period, the share price of Mindtree plunged the most 15.05 per cent to Rs. 1,260.35. It was followed by Wipro (down 13.11 per cent to Rs. 541.70), Vakrangee (down 11.18 per cent to Rs. 115.65), Infosys (down 10.93 per cent to Rs. 1994.30) and Tech Mahindra (down 7.81 per cent to Rs. 612.80).