Cognizant net rises 21%, overtakes Wipro in revenues

Cognizant, the US-based IT services giant that employs 88,000 people in India, on Tuesday posted 20.83 per cent growth in net profit to $208.04 million for the second quarter ended June, on strong expansion across verticals

The company had recorded net profit of $172.17 million in the April-June quarter last year.

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The company's revenues grew 34.4 per cent to $1.48 billion during Q2, 2011 from $1.10 billion in the same quarter last year, Cognizant said in a statement.

In revenue terms, Cognizant has now gone past Wipro and taken the third spot among software exporters from India, after TCS and Infosys.

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The Nasdaq-listed firm had been steadily closing the gap with big Indian IT players and has finally replaced Wipro from the third spot.

During April-June - first quarter of Wipro's financial year - the Indian company registered 16.9 per cent growth in IT services revenue at $1.40 billion.

"It was expected that Cognizant will surpass Wipro, but the manner in which it has happened is of huge magnitude and is commendable. While Cognizant has been giving strong guidance numbers, Wipro has posted muted outlook," Angel Broking IT Analyst Srishti Anand said.

Cognizant President and CEO Francisco D Souza said, "We continue to see stronger than anticipated demand for our increasing range of services across the industries we serve."

The company gave strong guidance for the quarters ahead.

It expects $1.57 billion revenues in Q3. For the entire 2011, it has projected revenue growth of 32 per cent, over 2010, to at least $6.06 billion.

Wipro, on the other hand, expects Q2 revenues from its IT services business to be in the range of $1.39-1.42 billion.

Anand said, "We expect Cognizant to remain strong in the coming quarters as well, looking at the performance and the guidance that it has been providing."

Cognizant saw 30 per cent year-on-year rise in revenues from financial services, while healthcare segment grew 37 per cent. These verticals contributed 41 per cent and 26 per cent respectively to the overall revenues.

In terms of verticals, Manufacturing and Retail (with 20 per cent revenue contribution) and Communications, Hi-tech, Entertainment and Media (13 per cent) recorded year-on-year growth 45 per cent and 29 per cent respectively.