Wipro, Mphasis, Tech Mahindra Shares Among Top Gainers As Cognizant Results Boost Sentiments
Cognizant reported better than expected fourth quarter results, and guided for higher growth in calendar year 2025.
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Wipro Ltd., Mphasis Ltd., Tech Mahindra Ltd., and Persistent Systems Ltd. were top gainers on the NSE Nifty IT index during market open on Thursday. US-based IT company Cognizant, which has operations across major Indian cities, reported better than expected fourth quarter results, and guided for higher growth in calendar year 2025.
The Nasdaq-listed IT major reported a revenue jump of 6.7% on the year to $5.1 billion, against estimates of $5.06 billion. For the entire 2024, Cognizant's revenue grew 1.9% on the year in constant currency terms to $19.7 billion. During this period, its margin expanded 80 basis points.
Following better than expected performance in the fourth quarter, Cognizant guided for 3.5–6% growth for 2025, compared to 1.4–1.9% guidance in the preceding quarter. However, the guidance is less than what analysts had estimated for the IT giant.
"The company is delivering extremely well in the healthcare vertical, with an acceleration in growth through CY2024. It has also demonstrated better execution in financial services, though there are still a few rough edges that need to be smoothened out," Kotak Institutional Equities said. "The rough edges are in the aero, auto and manufacturing verticals."
The key positive from Cognizant Technology Solution Corp result was the return of discretionary spends and short cycle deals, particularly in the financial services vertical. This is in line with the commentary from Indian IT services firms, IIFL said.
Cognizant is expecting more growth on the back of improving demand, which fuelled positive sentiments for the Indian IT industry as it does substantial business with the US.
The Nifty IT index rose 1.27% to the day's high of 43,431.80. Market cap of companies listed in this index rose Rs 9,156.65 crore to Rs 36.21 lakh crore. as of 9:48 a.m. The index was trading 0.44% higher at 43,085.99 as of 9:50 a.m., as compared to a 0.16% decline in the NSE Nifty 50.
Shortly after market opened, Wipro Ltd. logged the most intraday gains to lead the rally, while Mphasis Ltd., and Tech Mahindra Ltd. followed. Meanwhile, HCLTech Ltd. logged the least increase.
As of 9:51 a.m., Wipro and Mphasis were up 0.09% and 0.91%, respectively. Tech Mahindra was 0.30% higher. HCLTech Ltd. was trading 0.62% higher.
