The Hindu Business Line : CTS net income rises 70% in Q2 to $61 m

Cognizant Technology Solutions has reported a 70-per cent increase in net income to $61 million for the second quarter ended June 30, 2006, compared with $36 million for the corresponding quarter last year. Revenue was $336.8 million ($211.7 million).

The US-based company with offshore development centres in India expects the third quarter revenue to be at least $363 million and the fiscal 2007 revenue to be $1.37 billion.

Cognizant recently increased its entry-level salary offers by 20 per cent for graduates joining the company during the 2007 season. The company has seen the benefits of this in its recruitment efforts, according to Mr Lakshmi Narayanan, President and CEO, The entry-level salary for engineering graduates would increase to Rs 2.50 lakh a year from Rs 2.10 lakh, said a company official.

"Our wages have remained within the range we are predicting," Mr Narayanan told analysts at a conference call to discuss the company's June quarter financial results.

In the second quarter, Cognizant added a net of 2,900 employees. On whether additional investments, especially in training, will affect the company's operating margins, Mr Narayanan said that it would not change the long-term impact of the operating margin, which will continue to remain in the 19-20 per cent range.

Mr Gordon Coburn, Chief Financial Officer, Cognizant, said that at the end of the second quarter, the company's global headcount, including both technical professionals and support staff, totalled 29,675. This represents a net increase of over 2,900 people during the quarter.