The BSE Information Technology index ended 3.40 per cent down at 10,604.47 on Tuesday after the Nasdaq-listed Cognizant Technology Solutions, a IT service provider issued a weak sales forecast. Cognizant, whose rivals include Indian IT services firms such as Tata Consultancy Services and Infosys Ltd said the financial services sector was off to a slow start this year.
Shares of IT majors Infosys and Tata Consultancy Services closed 3.46 per cent down at Rs 1109.30 and 3.68 per cent down at Rs 2281.45, respectively. Take Solutions and Tech Mahindra settled 6.12 per cent down at Rs 145.85 and 4.89 per cent down at Rs 447.65, respectively.
IT services provider Cognizant Technology Solutions forecast its slowest quarterly revenue growth in 14 years for the year 2016, adding to mounting worries about clients keeping a tight lid on technology spending. The share price of Cognizant Technology plunged 7.67 per cent to $54.05 on Monday.
Cognizant which provides both full year and quarterly guidance has projected revenue growth in the range of 10-14 per cent for 2016 as compared to 21 per cent it recorded for the year 2015. The company ended 2015 with a revenue of $12.42 billion and net profit of $1.62 billion.
Even for the first quarter of 2016, Cognizant expects revenue growth to be in the range of -1.5% to 0.3%, indicating a very flattish growth. The three months between January and March is generally considered to be a strong period for the company.