IT shares in demand

Ten IT shares rose by 0.08% to 2.53% at 10:31 IST on BSE after US-based Cognizant reported strong Q4 earnings yesterday, 4 February 2015.

MindTree (up 2.53%), Hexaware Technologies (up 1.86%), HCL Technologies (up 1.46%), Wipro (up 1.38%), TCS (up 1.01%), CMC (up 0.81%), MphasiS (up 0.81%), Infosys (up 0.69%), Tech Mahindra (up 0.63%) and Oracle Financial Services Software (up 0.08%), edged higher.

The BSE IT index was up 0.94% at 11,391.11. It outperformed the BSE Sensex, which was up 0.46% at 29,016.86.

The BSE IT index had outperformed the market over the past one month till 4 February 2015, rising 5.26% compared with 3.57% rise in the Sensex. The index had also outperformed the market in past one quarter, rising 5.28% as against Sensex's 3.67% rise.

December quarter sales of the Nasdaq-listed software services firm grew 16.4% to $2.74 billion in Q4 December 2014 over Q4 December 2013. It rose 6.2% in Q4 December 2014 over Q3 September 2014. Net income rose 11.90% to $362.90 million in Q4 December 2014 from $324.3 million in Q3 September 2014.

Cognizant expects revenue in Q1 March 2015 to be at least $2.88 billion. The company, which follows a calendar year in its financial reporting, said it expects full-year 2015 revenue to touch at least $12.21 billion, up 19% from a year ago.

Revenue for full-year 2014 increased to $10.26 billion, up 16.1% from $8.84 billion for 2013. In the September quarter, Cognizant had forecast full-year revenue for 2014 between $10.13 billion and $10.16 billion.

Meanwhile, the domestic IT shares also rose as the rupee edged lower against the dollar in the foreign exchange market. The partially convertible rupee was hovering at 61.81, compared with its close of 61.7525 during the previous trading session.

A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.

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