Led by TCS, IT stocks today declined in the range of 1-6% as sentiments turned weak on the sector after software services firm Cognizant lowered its full-year forecast due to weak demand.
Similarly, Infosys fell by 1.59%, Wipro was down 1.89%, HCL Tech dropped 4.70% and Hexaware Tech slipped 3.43%. Led by losses in these counters, the BSE IT index settled for the day 3.09% lower at 5,533.39. The downward revision by Cognizant in its revenue guidance for 2012 has worried investors about the near-term prospects of IT outsourcing, experts said. "IT stocks declined sharply after Cognizant lowered its revenue guidance for 2012 due to lower demand growth," Alex Mathews Head Research Geojit BNP Paribas said. Cognizant yesterday posted 17% rise in net profit at $243.7 million for January-March, 2012, but lowered its full-year forecast on low demand. The company lowered its full-year revenue outlook to at least $7.34 billion, from $7.53 billion forecast earlier. "Due to a slower than anticipated acceleration in demand, as we entered the second quarter, we are adopting a more conservative stance for the remainder of the year and revising our guidance to at least 20% revenue growth for 2012," Cognizant Chief Executive Officer Francisco D'Souza had said. The broader stock market was weak since morning and the BSE benchmark index Sensex closed down 366.53 points at 16,546.18.