Cognizant beats top Indian vendors in revenue growth

T.E. Raja Simhan | | Updated on: Mar 12, 2018

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Cognizant Technology Solutions has beaten all the three top India-centric competitors in revenue growth year-on-year and also sequentially during the December 2011 quarter.

In the fourth quarter, the US-based technology company with large offshore centres in India expanded revenue by 26.9 per cent year-to-year, beating India-centric competitors Tata Consultancy Services (20.6 per cent), Infosys (13.9 per cent) and Wipro ITS (13.1 per cent).

Like its peers, however, Cognizant's top line growth remains leveraged on headcount expansion. Cognizant will continue to outpace Indian competitors by sacrificing margin expansion to increase revenue growth, said Mr Erin Hichman, Analyst, Professional Services Practice with the US-based technology research firm Technology Business Research, Inc.

Mr Hichman says Cognizant will seek to reduce this linearity by leveraging tuck-in mergers and acquisitions, and research and development investments to expand its portfolio of IP-backed offerings and platform solutions.

Cognizant retained its position as No. 3 Indo-centric vendor for the third consecutive quarter and gained ground on Infosys for No. 2 position.

Cognizant is actively pursuing tuck-in acquisitions to extend its vertical expertise in healthcare and financial services and augment its IP assets in analytics and other growing technology areas.

At the Barclays Capital Global Technology Conference in December 2011, Cognizant noted that it was pursuing merger and acquisitions in a sweet spot range of $20-80 million, which TBR anticipates will focus on adding consulting expertise in electronic health records to capture legislative-driven demand from US-based payers and providers, he said.

Mr Sudin Apte, Principal Analyst and CEO, Established Thought Leader in Offshore, Outsourcing and IT Services at research firm Offshore Insights, said that in the last few quarters, Cognizant has shown remarkable revenue performance. It has been improving quarter-on-quarter, and has maintained the growth momentum.

The company had a lead on packaged IP over Indian competitors, he said. “In my opinion, Cognizant and and TCS will emerge as leaders in future,” he said.

> raja@thehindu.co.in

Published on February 20, 2012
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