Shares in IT majors TCS, Infosys and HCL Tech dropped sharply, after Cognizant forecast its slowest revenue growth in 14 years for the current quarter, as clients worldwide cut IT spending.
Cognizant, which is not traded on the Indian markets, saw its share price plunge in the US Markets. While, its profits and revenues for the quarter largely met expectations, the guidance spooked analysts and investors.
The company has guided for 10-14 percent growth for the full-year, which was below estimates. This led to a drag on the share price of Infosys, which dropped 3.7 per cent at Rs 1108, while TCS was down 3.5 per cent and HCL Tech down 3 per cent, along with Tech Mahindra, which was down almost 4 per cent.
Cognizant's revenue for the fourth quarter of 2015 rose to $3.23 billion, up 17.9% from $2.74 billion in the fourth quarter of 2014.
GAAP net income was $423.4 million, or $0.69 per diluted share, compared to $362.9 million, or $0.59 per diluted share, in the fourth quarter of 2014. Diluted EPS on a non-GAAP basis was $0.80, compared to $0.67 in the fourth quarter of 2014. GAAP operating margin was 17.1% and non-GAAP operating margin was 19.6% for the fourth quarter of 2015.
Full year 2016 revenue guidance was expected to be in the range of $13.65 billion to $14.20 billion.