MphasiS declines 5% after HP's poor guidance

Shares of IT consulting company MphasiS fell 5% to 417.25 on Wednesday, after US-listed computer manufacturer Hewlett-Packard, which is a major stakeholder in the company, lowered its earnings guidance. HP CEO Leo Apotheker on Tuesday said the company was bracing for "another tough quarter" in the May-July period, and that the management needed to "watch every penny and minimise all hiring".

The company expects profit margins to take a beating as a result of weak personal computer sales and the Japanese earthquake. Back home, institutional investors sold MphasiS on apprehension that the Indian company will be deeply impacted if there is a fall in business for HP. According to analysts, about 70% of MphasiS' revenue comes from HP.