IT stocks came under selling pressure today, falling by up to 5 per cent, after Cognizant gave a lower revenue guidance for 2016.
Shares of Tech Mahindra fell by 4.89 per cent and HCL Technologies was down 4.52 per cent on the BSE.
Among others, TCS went down by 3.68 per cent, Infosys lost 3.46 per cent and Wipro fell by 1.72 per cent.
Consequently, the BSE IT index went down by 3.40 per cent to 10,604.47 at close.
"IT stocks came under heavy selling pressure taking clues from the weak guidance given by Cognizant," said Jimeet Modi, CEO, SAMCO Securities.
The US-based IT services firm Cognizant yesterday posted a 16.7 per cent rise in net profit at USD 423.4 million for the December quarter, from USD 362.9 million a year ago, helped by growth in healthcare and North America and Rest of World (RoW) geographies.
The company, which has a large part of its workforce based in India, met its revenue guidance at USD 3.23 billion in the said quarter, up 17.9 per cent from USD 2.74 billion in October-December of 2014.
However, the management expects negligible change in January-March of 2016 from the preceding quarter and has forecast revenues to be in the range of USD 3.18-3.24 billion.
For the entire 2016, Cognizant expects to grow at 9.9-14.3 per cent, translating into a revenue of USD 13.65-14.20 billion.
While this was in line with Indian IT industry body Nasscom's estimate of 10-12 per cent growth for 2016-17, it is lower than its own 21 per cent growth it clocked in 2015.
