Cognizant's dream run continues in June quarter

India's second largest IT company Cognizant continued its good run, reporting stellar numbers for the quarter ended June, beating all its top tier rivals in terms of growth (in dollars).

The Nasdaq-listed company beat analyst expectations for its second quarter with a topline growth of 7 per cent compared to the March quarter to reach $2.16 billion.

The growth rate is well ahead of TCS's, India's largest IT exporter, which grew revenues at 4.1 per cent in the same quarter. HCL Technologies grew 3.1 per cent, Infosys 2.7 per cent and Wipro, just 0.2 per cent during the quarter.  

Cognizant, in fact, is confident of its strong run continuing for the rest of the year as well.

The firm revised its annual guidance upwards by two percentage points to 19 per cent.  For the full year 2013, it now expects revenues of at least $8.74 billion - up from $8.60 billion anticipated at the end of the March quarter.

This implies that the company will grow at twice the pace of third-placed Infosys and consolidate its lead over Infosys during the year. Infosys expects its yearly revenues to grow between 6 and 10 per cent in 2013/14.  

Cognizant's numbers and that of other IT companies indicate a strong rebound in the global outsourcing market in the backdrop of a recovering economy in the United States. Cognizant said it was seeing broad-based growth across geographies, industries and services.

Its bread and butter Financial Services, which contributes to a whopping 42 per cent to its revenues, grew 6.5 per cent sequentially. Its second biggest vertical health-care, which generates upto 25 per cent of its revenues, climbed 6.2 per cent. Manufacturing and retail, however, grew the fastest at 8.4 per cent.

The company reported a GAAP net income of $300.4 million, up 5.7 per cent sequentially.

"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," CEO Francisco D'Souza noted in a statement. "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."

Cognizant closed at $73.41 on the Nasdaq on Monday.