Nearshore Americas

Cognizant Starts to Win More Deals than Bigger Indian Rivals

Source: WSJ

Tata Consultancy Services, Infosys Technologies and Wipro may be the best-known Indian software services companies, but a much smaller U.S. firm has raced ahead of the Big Three in financial performance.

Cognizant Technology Solutions (with Latin American facility in Argentina), which was spun off from credit-information provider Dun & Bradstreet Corp. in 1996, is headquartered in Teaneck, N.J., and listed on the Nasdaq, but most of its operations and three-quarters of its work force are in India.

On Tuesday, it said its revenue rose 6.3% to $960 million for the quarter ended in March, compared with the prior quarter. It forecast a $55 million increase for the current quarter ending June 30.

The growth forecast is aggressive even when compared with bellwether Infosys, which expects a $34 million to $44 million revenue increase in the current quarter.

Cognizant added 52 clients and expanded its staff by 7,100 employees last quarter, indicating the strength of the deals it has in the pipeline. The employee addition is next only to India’s top tech outsourcer, Tata, which added 10,775 staff in net terms during the same period.

Cognizant’s U.S. base and investments in sales personnel helped it pick up on customer signals better than its competitors, analysts said.

Last fiscal year, when India’s software exporters complained about a “difficult environment” that weighed on sales, Cognizant managed to outperform the top boys. While Infosys revenue increased by $141 million last fiscal year, Cognizant posted a $574 million increase.

On this front, Cognizant left India’s other two big IT firms in the dust — TCS’s new revenue last fiscal year was $324 million, while Wipro added $67 million.

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While Infosys added 141 clients last fiscal year, Cognizant bagged 201. It also increased its share of the world IT services market to 0.4% in 2009 from 0.3% last year, while India’s top three barely managed to maintain their territory, according to research firm Gartner Inc.

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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