Nine IT stocks rose by 0.3% to 2.94% at 11:29 IST on BSE after Cognizant Technology Solutions Corp on Tuesday, 5 November 2013, raised its full-year forecast for both profit and revenue at the time of announcing its Q3 result September 2013 results.
HCL Technologies (up 0.3%), Tech Mahindra (up 2.85%), Polaris Financial Technology (up 2.94%), Wipro (up 1.28%), MphasiS (up 0.74%), Infosys (up 0.94%), Oracle Financial Services Software (up 0.37%), and Hexaware Technologies (up 0.22%) edged higher.
The S&P BSE IT index was up 1.27% at 8,451.75 and was the top gainer among the sectoral indices on BSE. It outperformed the Sensex, which was up 0.16% at 21,007.87.
The S&P BSE IT index underperformed the market over the past one month till 5 November 2013, rising 4.04% compared with the Sensex's 5.32% rise. The index, however, outperformed the market in past one quarter, advancing 10.06% as against Sensex's 9.34% rise.
IT stocks gained as IT services firm Cognizant Technology Solutions Corp, a Teaneck, New Jersey-based company, which has most of its employees in India raised its full-year forecast for both profit and revenue at the time of announcing its Q3 September 2013 results on Tuesday, 5 November 2013. Cognizant reported a better-than-expected 22% rise in revenue in third quarter, helped by contracts from insurers setting up online exchanges as part of President Barack Obama's healthcare reforms. The company, which also raised its full-year forecast for both profit and revenue, said it would focus on winning more business from governments. The company's net income rose to $319.6 million, or $1.05 per share in the third quarter, from $276.9 million, or 91 cents per share, a year earlier. The company said it expects earnings of at least $4.01 per share on revenue growth of at least 20.3% to $8.84 billion for the year ending 31 December 2013. It had previously forecast earnings of at least $3.96 per share on revenue growth of at least 19% to $8.74 billion for 2013.
Shares of Tata Consultancy Services (TCS) were boosted by the company announcing after market hours on Tuesday, 5 November 2013, that Zions Bancorporation, one of America's premier financial services companies, has chosen TCS BaNCS for its core banking transformation program to achieve standardization, centralization and straight through processing across the enterprise. In addition to the cost saving benefits, the ability to have a single, 360 degree view of its end-user customers is a key focus of the core replacement program.
The depth of TCS BaNCS' capabilities, its implementation track record and overall quality of banking and technology experts were among the major factors that influenced this selection by Zions Bancorporation, which consists of a collection of great banks in select Western US markets with combined total assets exceeding $50 billion. The transformation will be completed in phases, with Zions' management expecting significant improvements in operational efficiency and customer experience, and reduced operational and financial risk stemming from older legacy systems.
Meanwhile, positive economic data in the US also supported IT stocks. The US is the biggest outsourcing market for the Indian IT firms. The US Institute for Supply Management's gauge of service industries climbed more than strategists predicted, data showed on Tuesday, 5 November 2013 stoking concern that the world's biggest economy is faring well enough for the Fed to consider reducing asset purchases. Fed policy makers last week signaled diminishing concern over higher borrowing costs as they maintained their $85 billion in monthly bond-buying and sought more evidence of sustained growth before paring stimulus.
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