Cognizant topples Infy

Cognizant has again upset the tech pecking order, displacing India’s trophy tech firm Infosys from the second slot, albeit as expected. Cognizant was only a third of the size of Infosys in December 2002. TCS continues to retain the top slot. Cognizant also maintained and met its guidance of 20%, which it had set in the previous quarter. In May, the company had downgraded its guidance by 3 percentage points for the first time in four years. 
On Monday, Cognizant posted revenues of $1.795 billion for the June quarter versus $1.752 billion by Infosys. Cognizant managed to go past Infosys by about $43 million in just one quarter. Infosys lost $19 million of its topline in the June quarter and $35 million in the March quarter. Cognizant, founded as the technology captive arm of Dun & Bradstreet Corp (D&B) in 1994 in Chennai in recent years, has displaced several rivals on its onward march. Infosys had retained the second slot for around two decades before losing it to Cognizant on Monday. 
The last two quarters have been particularly weak for Infosys, while, in three of the last four quarters, Cognizant has added more incremental revenue than its peers, followed by TCS. Cognizant added $47.3 million to its March 2012 revenue and $84 million to its June revenue. The gap between Cognizant and Infosys could widen over the next few quarters going by the statements made by the respective CEOs. While declaring the results for June quarter, Infosys’ Shibulal had said that the global environment had become a big challenge, consumer confidence not just in Europe but even in the US had fallen, and big deals were being cancelled. He said the environment had become so volatile that the company had decided not to issue a guidance for the second quarter. 
Gordon Coburn, president of Cognizant, however, said this dim scenario was in fact responsible for clients to opt for more services. Cognizant’s quarterly revenue grew by 4.95% on a quarter-onquarter basis and 20.9% on a year-on-year basis. Net profit for the company stood at $251.9 million, up 21.1% compared to $208 million in the previous quarter.