Riding on Cognizant numbers, IT shares edge higher in sluggish market

Shares of domestic information technology companies clocked smart gains in a dull market early Thursday, enthused by strong Cognizant earnings numbers announced a day before which comfortably beat estimates and also raised its full-year revenue guidance for the second time during the year. During the second quarter ended June 30, the US-based technology solutions company posted a net profit of $420.1 million on revenue of $3.09 billion, and indicated revenue to reach $12.33 billion in 2015. [caption id=“attachment_2381174” align=“alignleft” width=“380”] Reuters[/caption] With the US economy on a revival mode for the past year or so, investors back home expect outsourcing jobs from the US clients to gain momentum going ahead, benefiting the large-cap IT companies here which derive a major chunk of their overall revenues from the North American business. Last month, Infosys, on a consolidated basis, also reported a 5 percent year-on-year growth in net profit at Rs 3,030 crore in the April-June quarter of 2015 while consolidated total income of the company grew 11 percent on-year to Rs 15,112 crore. Persistent optimism in IT stocks could be due to improving outlook for the overall sector and hopes of earnings acceleration in the remaining quarters of the current fiscal, said market experts. At 10.25 am, the BSE IT index was at 11,192.17, up 0.4 percent. Among the gainers, Infosys rose nearly 1 percent to Rs 1,096.80 and TCS and HCL Tech 0.5 percent each at Rs 2,555 and Rs 942.95, respectively.