Cognizant has disturbed the whole Indian IT's pecking order. The number two spot, which Infosys has been holding for a long time, has been snatched by Cognizant last week. Based on latest financial evaluation, Cognizant posted revenue of $1,795 million in comparison to $1,752 of Infosys during the second quarter of 2012-13. Cognizant Technology Solutions Corp. has actually beaten its own earnings per share (EPS) outlook and met revenue guidance, replacing Infosys as India’s No. 2 software services provider based on quarterly revenue.
It is worth noticing, Cognizant also overtook Wipro Ltd on the same basis, last year.
If market experts are to be believed, Cognizant’s lead in revenue is not an aberration. Cognizant is also expected to continue its growth at a faster pace than Infosys in the coming quarters as well.
Let’s check out some significant points that helped Cognizant to beat Infosys:
Financial services business:
Most significantly, growth in financial services vertical has helped Cognizant. It contributed the largest chunk to revenues for Cognizant. Revenue from this segment grew 6 per cent sequentially for Cognizant, while its contender Infosys saw a sequential decline.
Sales & marketing, which is the most important segment of a business, Cognizant spent more these two segments in past quarters. Evaluating the latest financial statement, it is observed that Cognizant followed a policy of keeping its margins at 19 – 20 percent and investing the remaining capital in sales and future growth areas.
Flexibility in margins and pricing has facilitated Cognizant to explore more opportunities to win projects. Cognizant has recently pitched some good clients including JPMorgan, American Express and Pfizer.
Newer verticals for growth:
Management commentary indicated, Cognizant invested big capital in management consulting, BPO/KPO, remote infrastructure management, mobility, cloud and social computing, enterprise analytics and big data, which further helped the software giant to surpass Infosys.
Keeping the latest scenario in mind, it is beleived, if Infosys want to come back to its previous position of IT bellwether, it has to keep an eye on emerging trends just as Cognizant is doing. In simpler words, Infosys should learn to find opportunities in crisis. Infosys has been doing exceptionally well and will continue its growth momentum, but it cannot rely on the past services to withstand the economy which is sliding towards recession.
Satinder /ITVoir NewsDesk
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