Dalal Street Investment Journal: Cognizant’s Group Chief Executive for Industries and Markets Talks About Cognizant’s Strong Performance and Demand Drivers in Q2-2013

“In the June 2013 quarter, we delivered industry-leading revenue growth yet again, not only exceeding our second quarter revenue and EPS guidance but also increasing our full-year revenue and EPS guidance,” says Rajeev Mehta. “The addition of USD 141 million in sequential revenues was the second highest incremental revenue addition in the history of Cognizant. We saw broad-based growth across geographies, industries and services. We continue to see a trend towards newer strategic customers embracing a wider range of Cognizant’s services at an earlier stage in the relationship.”

He adds, “In the 15 years of our listing on the NASDAQ stock exchange, one thing that has remained absolutely consistent is our strategy of re-investment in the business to drive topline growth. All along, we have maintained stable operating margins and delivered industry-leading revenue growth.”

Cognizant sees a continuation of a healthy demand environment for our services, says Mehta. “The improved demand comes from a combination of macro trends and our own competitive positioning. We have seen a strong pick-up in discretionary spending, in line with what we see in a normal budget-and-spend cycle,” he says.

Talking about how Cognizant has focused investment across three growth horizons in recent years, Mehta explains, “We implemented this three horizon approach in response to a fundamental long-term shift we identified in our clients’ business imperatives. We think of those imperatives in terms of a ‘dual mandate’ to run better by driving greater performance and to run differently by improving the positioning of their businesses for future success.”

Mehta says that Cognizant continues to build capabilities in SMAC (Social, Mobile, Analytics and Cloud) technologies. “We continue to see strong evidence that SMAC is the next secular shift in computing, and are investing accordingly,” he says. “We have had some great client wins across our SMAC practices. We are also pleased with the healthy growth in our Horizon 1 services (application development and maintenance) and Horizon 2 services (BPO, IT infrastructure services and consulting). This is further validation of our balanced approach to growing and integrating our core services with our emerging services and new service offerings.”

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