Cognizant December quarter numbers lag peers

Cognizant, India's second largest IT services exporter, has reported its fourth quarter numbers ended December. It met analyst revenue expectations but lagged most of its Indian large tier peers in growth.

The company follows the calendar year.

Cognizant's quarterly revenues grew 2.2 per cent sequentially to $2.36 billion. In comparison, India's largest IT services firm TCS grew 3 per cent, HCL Technologies 4 per cent and Wipro 2.9 per cent during the December quarter.

The December quarter, however, is seasonally weak for IT companies because of the less number of billing days. Also, Cognizant's tepid looking growth is because of the base effect - the firm reported an exceptional third quarter when its revenues jumped 6.7 per cent sequentially to $2.31 billion.

The December quarter, nevertheless, rounded off an excellent year for Cognizant.

The firm's full year revenues increased to $8.84 billion, up 20.4 per cent from 2012. The company also guided to strong growth in 2014 - full year 2014 revenues are expected to be at least $10.3 billion, up 16.5 per cent compared to 2013. The guidance implies that global spending on IT services will remain robust in Cognizant's primary market, North America.

Cognizan't GAAP net profit for the quarter was at $324.3 million. The firm added a net headcount of 5,000.

"Our growth during 2013 was broad-based across our industries, geographies and service lines," Gordon Coburn, President of Cognizant, said.

"This strong growth was fueled by our clients' on-going drive to 'run better' for more efficient and productive operations and to 'run different' to create the capabilities and business models they need for future success. Our strong portfolio of services coupled with our focus on new technologies and platform-based delivery models will help clients drive meaningful change as businesses become increasingly technology intensive. We anticipate that the healthy demand environment we witnessed in 2013 will continue into 2014 and we are well positioned to capture it," he added in a media statement.