Cognizant Tech may post lower growth in 2013
Cognizant’s 8-K filing with the US SEC on the stock option targets for the top executives for 2013 states: “100% of the performance units, which are awarded shall vest upon the company’s achievement of 2013 revenue of $8,515,000,000 ($8.5 billion)”.
This indicates that the company would achieve a revenue growth of 16% compared with 2012. For 2012, Cognizant has guided to an annual revenue of at least $7.34 billion, up at least 20% compared with 2011.
The indication given by Cognizant would have a bearing on the Indian IT industry as it gives a kind of preview on the likely demand for technology services in 2013. Already, Nasscom, the apex industry body, has revised the growth lower to at least 11% from the earlier 11-14% for the 2013 fiscal.
Reacting to these developments, the BSE IT index dropped by 69.72 points on Wednesday recording a decline of 1.19% while the broader Sensex rose marginally by 0.30%.
The rapid growth of Cognizant into the top league of multi-billion dollar IT services firms with the ability to outperform the market even in a downcast environment has made it one of the star performers along with Tata Consultancy Services (TCS).
JP Morgan in its note following the announcement
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