The Hindu Business Line : Cognizant, Genpact grew fastest: Report

Chennai, May 3 Cognizant Technology Solutions and Genpact (both having a strong base in India) have the highest “trailing 12-month growth rates – an indication of fast growth – with 5.7 per cent and 5.1 per cent” respectively.

This is the highest among a list of 30-plus global IT companies, including Infosys and Tata Consultancy Services, in a benchmark report, with the exception of HP Services, which acquired EDS, according to US-based advisory firm Technology Business Research Inc (TBR).

TBR calculated the trailing 12-month growth rate for all the companies and identified the companies that grew the fastest.

For Cognizant, for example, TBR added the quarterly results of 2008 and compared it with a year’s results from the fourth quarter of 2007 to third quarter of 2008. The difference was a growth rate of 5.7 per cent, said Mr Eugene Zakharov, Director, Professional Services Business Quarterly (PSBQ), Technology Business Research. “Both Cognizant and Genpact are benefiting from rising demand for cost-containment services and continue to leverage offshore capabilities. However, India-based vendors are not immune to the global economic climate; many are facing pressure on their top lines and declining pricing power as clients have slashed IT budgets and are pushing to renegotiate existing contracts,” he said.

Technology Business Research’s PSBQ Benchmark report provides expert analysis of services companies’ businesses and operations; their strategies, actions and financial results; and what might be expected in the coming quarters. The companies covered include Accenture, Cognizant, Genpact, HCL Technologies, HP Services/EDS, IBM Global Services, Infosys, TCS, Perot, SAP Services and Sun Services.

‘2009, a tough year’

IT market is still not out of the woods. TBR does not expect to see a dramatically different demand picture in 2009, and anticipates that the impact of unfavourable currency fluctuations, elongated sales cycles, slashed IT budgets and postponed consulting projects will continue to put pressure on IT vendors’ top line growth.

“We expect 2009 to be a tough year for IT services vendors, with market growth being flat at best compared with 2008,” Mr Zakharov said.

Intensifying economic turmoil caused another quarter of slowing growth rates for the majority of the IT services companies covered in the PSBQ Benchmark. As a result of the conditions in established markets, vendors are increasingly turning to emerging markets – particularly the Asia Pacific region, which has not been as severely impacted by the recession.

However, one bright spot for IT services companies has been increased demand for their cost-containment solutions and for business process outsourcing as clients seek to cut costs to survive the downturn, he said.

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