Voluntarily limiting operating margins and steady investments in growth are the reasons behind the success of Cognizant, according to its Vice-Chairman Lakshmi Narayanan.

As the company was a ‘late comer’, it could learn from the mistakes of the early birds, he said.

In his keynote address at BITS Alumni Association’s global meet here on Saturday, Narayanan said investing well is key to growth.

“Many of you have asked me about the secrets of our success. Limiting the operating profits at about 20 per cent and investing any earnings above it has been helping us,” he said.

The company invests in innovation, ideas, people and incubation centres, he said, adding: “Cognizant is investing a lot in healthcare.”

However, it is a challenge for the listed company, as investors like to see higher returns. But they are assured of stable margins and high growth, he said.

“Many students of BITS-Pilani who are our employees have also built the company,” Narayanan said. he observed.

naga.gunturi@thehindu.co.in

(This article was published on January 4, 2014)
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