Cognizant beats rivals in second quarter
Cognizant Technology Solutions Corporation is quite ahead of the race beating rivals Wipro, HCL Technologies and TCS in the second quarter. It reported a 19 per cent increase in net profit to $300 million for the second quarter ended June 30, 2013, against $252 million in the second quarter 2012.
Quarterly revenue rose to $2.161 billion, up 20.4 per cent from the year-ago quarter and 7 per cent sequentially. The addition of $141 million in sequential revenue was the second highest incremental revenue addition in Cognizant’s history, says a company press release.
Interestingly, a year ago too it clocked an impressive 20 percent hike in net revenues, again outshining all its competitors. IT advisory firm Gartner, said that as of the second quarter results of 2012, Cognizant displaced Infosys as the second largest IT services provider with worldwide revenue of $7.1 billion.
Gartner views Indian players as those who mainly have India-based delivery model and management. Most firms are headquartered in India, but a few like Genpact, Cognizant, Syntel and iGate, are headquartered in the US. However, their delivery, management, operating style, among other things, are like those of other Indian providers.
“As we celebrate the 15th anniversary of our public listing on the Nasdaq stock exchange, we are delighted to yet again deliver industry-leading revenue growth,” said Francisco D’Souza, Chief Executive Officer. “Our 15 year record of revenue and earnings growth is a testament to our long-term strategy of reinvesting in our business to stay relevant to our clients’ changing needs and to provide increasing value as we grow each of those trusted relationships. This reinvestment strategy continues to enable Cognizant to excel in our core services while simultaneously investing in multiple horizons of growth, thereby continuing to position us well for the future,” he said in a press release.
TCS leads the IT services providers with revenue of $10.9 billion, followed by Cognizant ($7.1 billion), Infosys ($6.7 billion), Wipro ($5.7 billion) and HCL Technologies ($3.9 billion) in 2012.
Cognizant’s net employee addition during the second quarter of 2013 was the lowest in the last two years reflecting the market sentiments. Cognizant’s top three Indian competitors – Tata Consultancy Services, Infosys and Wipro – too had a similar trend.
Cognizant’s net employee hiring was 1,600 in the second quarter. The previous lowest in the last two years was 2,800 in the first quarter of 2012. Over 90 per cent of Cognizant’s 1.64 lakh employees are working in India.
“We hired heavily in the past few quarters in preparation to meet the growing demand. Our plan was clearly to take up utilisation, which is what we did during the quarter. We shall continue to hire to meet the continued healthy demand as manifest in the company taking up the full year revenue growth guidance to at least 19 per cent from at least 17 per cent last quarter,” company spokesperson was quoted as saying.
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