The Hindu Business Line : ‘Cognizant to adopt more conservative approach in Q2’

Chennai, May 8 Project delays and IT spending cutbacks with banking and capital market customers in the US over the past 6-8 weeks have prompted the US-based Cognizant Technology Solutions to adopt “a more conservative approach to June quarter and full year 2008,” according to its President and CEO, Mr Francisco D’Souza.

During the later part of the first quarter, there was a further weakening in the US economy particularly in the financial services industry. In the quarter, growth in all our segments outside financial services was strong, he told analysts while discussing the company’s first quarter financial results.

“We assume that sequential financial services growth will be in single digit during second quarter,” said the CEO of the Nasdaq-listed software company with offshore development centres in India.

Cognizant reported a 36 per cent increase in net income at $102 million ($75 million) during the first quarter ended March 2008. Revenues increased by 40 per cent to $643 million ($460 million).

Better pipeline

Cognizant expects increase in its sequential growth in the second half of the year based on factors like better pipeline of new business with existing clients.

New customers continue to be strong and the general trend towards spending more with offshore providers still remains intact as clients under pressure seek additional ways to do more with fewer dollars, he said.

The company is tracking 50 large opportunities at various stages with each having a revenue potential of ‘many million dollars’ over several years. Several of these deals are existing clients who are looking to move additional work to an offshore model, more aggressively.

Customer base

Cognizant added 56 new customers during the first quarter and closed the quarter with 505 active customers.

During the quarter, the number of accounts that the company consider to be strategic and have the potential to ramp up to at least $5 million to over $50 million in annual revenue increased by six, bringing our total number of strategic clients to 113.

For the remainder of the year, the company in the short-term focus on areas where the company sees core market strength in sectors such as healthcare and life sciences; retail and manufacturing and media and entertainment and continue to see benefits deepening our knowledge of the industries that it serves.

More Stories on : Outlook | Software

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
DoT defers decision on VSNL stake sale

MTNL in pact with Contakt

ESC welcomes tax break decision

ARM opens VLSI test lab

Virgin Atlantic, TCS renew contract

Juniper bidding for network projects in four States

Go-Frugal develops retail solution for SMEs

Yahoo! India unveils Glue Pages

Nace Solutions, AU-KBC pact for certification courses

Collabera likely to double headcount in next few years

3i Infotech buys 26% in Locuz

Smaller telcos eye global acquisitions

Patni, Schindler tie up

Toonz selected for tech show

‘Cognizant to adopt more conservative approach in Q2’