CNX IT index falls 3% led by TCS, HCL Tech

TCS and HCL Technologies were down 8% each on National Stock Exchange.

Shares of frontline information technology (IT) shares like Tata Consultancy Services (TCS) and HCL Technologies are under pressure, falling by 8% each, after reporting a lower-than-expected earnings for the quarter ended September 2014.

The NSE CNX IT index, a gauge of IT companies, is the largest loser among sectoral indices, has dipped 3.2% or 347 points at 10,828 compared to a marginal 0.02% decline in benchmark index CNX Nifty at 1110 hours.

TCS has dipped 8% to Rs 2,465 on NSE after reported a 7.4% quarter-on-quarter growth in revenue at Rs 23,816 crore for the quarter ended September 2014. The consolidated net profit dips 5.8% at Rs 5,244 crore on sequential basis.

Analyst, on an average, had expected net profit of Rs 5,385 crore on revenues of Rs 23,993 crore for the quarter. Q2 dollar revenue growth of 6.4% was also the below street expectation of 7.3-8%.

HCL Technologies, too, slipped nearly 8% at Rs 1,529 after reported lower than expected revenue at Rs 8,735 crore for the quarter ended September 2014, up 3.7% compared with previous quarter ended June 2014.

Analysts, on an average, had expected revenues of Rs 8,804 crore from the country’s fourth-largest software services exporter. Its dollar revenue growth of 3.2% on sequential basis, was lower compared its peers Infosys (3.2%) and TCS (6.4%).

Shares of CMC dipped 13% to Rs 1,884 after IT firm said it will be merged with the group firm Tata Consultancy Services (TCS). CMC shareholders will get 79 equity shares of Re 1 each of TCS for every 100 equity shares of Rs 10 each of CMC.

Among the other individual IT shares, Hexaware Technologies, Persistent Systems, Tata Elxsi and KPIT Technologies are down between 3-5% on NSE.  Infosys however, trading 0.4% higher at Rs 3,881.