IT shares hit on Cognizant SEC filing

Indian IT shares down on fears that Cognizant Technology Solutions Corp may issue a lower revenue growth guidance for 2013 based on compensation targets for top executives, dealers said.

Cognizant, in a filing to the SEC on Tuesday, said its top executives will receive 100 percent of their performance-linked shares if the company achieves revenue of $8.5 billion next year, a 16 percent rise over its projected 2012 revenue.

The rise would be lower than the 20 percent growth, equivalent to revenue of $7.34 billion, projected by the company in 2012.

Dealers say Cognizant's earnings outlook is a bellwether for the earnings of other Indian IT firms.

Sentiment was also dampened by Cowen's downgrade of Infosys Ltd to 'neutral' on Tuesday due to fears of a protracted revenue growth recovery.

"This is just a knee-jerk reaction. With the rupee at 55 levels, the third-quarter earnings cannot be bad for the IT sector," said Kishore Ostwal, chairman of CNI Research, expecting technology stocks to bounce back.

Infosys down 2 percent, Wipro Ltd 1.9 percent lower, Tata Consultancy Services 0.6 percent down, against the broader BSE index, which is up 0.2 percent.