IT stocks in demand as Cognizant ups revenue guidance for 2013

IT stocks on Wednesday rose by as much as 3.4 per cent after Cognizant posted 15.4 per cent jump in net profit for the third quarter ended September 30, 2013 and revised its full year revenue target.

Shares of TCS surged 2.43 per cent, while Infosys rose by 1.25 per cent and Wipro was up 0.50 per cent on the BSE.

Among others, Tech Mahindra gained 3.41 per cent and Oracle Financial Services Software was up 0.15 per cent.

The BSE IT index settled for the day 1.39 per cent higher at 8,462.12 and was the top gainer among the 13 sectoral indices.

IT services major Cognizant on Tuesday posted 15.4 per cent jump in net profit for the third quarter ended September 30, 2013 helped by growth in Europe, rising demand for outsourcing services and uptick in discretionary spend on consulting and technology services.

The US-based company's net profit, which beat market expectations, rose to $319.6 million for the third quarter from $276.9 million during the year ago period.

Revenues were up 6.7 per cent to $2.31 billion on a sequential basis and 21.9 per cent ($1.89 billion) on a year-on-year (y-o-y) basis.

Buoyed by the strong set of numbers, the New Jersey-headquartered company revised its full year revenue target.

For 2013, it now expects revenue to be at least $8.84 billion, a growth of at least 20.3 per cent over 2012. It had given a guidance of 19 per cent growth in revenue ($8.74 billion) compared to 2012.