Cognizant guidance gets peer stocks like HCL Tech and Tech Mahindra buzzing
- Nifty IT Index is up 1.1% in early trade on July 29, right after Cognizant declared its earnings.
- HCL Tech and Tech Mahindra ranked among the top five gainers on the Nifty 50, the benchmark index.
- The Nasdaq-listed Cognizant increased its growth guidance to 10.2%-11.2% citing demand in the digital services segment.
The company posted a revenue growth of $4.6 billion which grew 14% year-on-year. Also, it increased growth guidance to 10.2%-11.2% due to improved demand in the digital services segment.
And that has got the entire sector excited. HCL Technologies and Tech Mahindra are among the top five gainers on the Nifty 50.
*as of 10:20 a.m. on July 29
|Stock||Gains on July 29|
|Tata Consultancy Services||0.7%|
Although Cognizant is a US-listed company, its growth and client base is similar to Indian IT companies and hence growth pickup in the global company is positive for Indian peers.
The global IT firm beat expectations with June quarter strong performance as revenue was $125 million more than the high-end of the company’s guidance range.
However, the company’s attrition rate is at 31%, the highest among peers, compared to 21% in the previous quarter. This led the company to hire more than 3 lakh employees.
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