The Firm
Cognizant Technology Solutions, ranked 7th in the Forbes List of 25 Fastest Growing Technology Companies in America
The Boss
Francisco D’Souza, 40, CEO
The Gamble
To sacrifice some profit and reinvest it in growth
The Risk
Investor discontent at lower returns
The Reward
Among the least hit by the slowdown, growth intact
Track Record
Five-year average revenue growth 48 percent, net profit growth 46 percent
Future Projects
10 percent revenue growth in 2009 vs. industry growth in single digits for 2009-10
Another such investment was in 2003-04-05. Our company and our industry were poised for rapid growth and we said the best way to capitalise on growth at that time is to have a best team of people at short notice for our clients. We brought [staff] utilisation to lower levels.
(This story appears in the 17 July, 2009 issue of Forbes India. To visit our Archives, click here.)
Though nothing can be taken away from Cognizant for this strategy. But the lesser impact it is enjoying also has to do with the sectors they are in. Almost 30% of the revenues come from Health Sciences which is not impacted by recession.<br /> <br /> Though its great that they have re-invested in making a stable framework for further growth, it will be a crucial stage when they themselves feel that they are in the maturity phase. Will be interesting to see what will be the next step then. And what will happen to all the latent value.
on Aug 4, 2009After I read this piece in Forbes, I went back and looked at the company' financials over the last 10 years of their listed history. Then I realized that Cognizant should have ideally been the cover story in Forbes and not Infosys. The PSPD model that Infosys so unabashedly talks about (what predictability is Infosys talking about when they bring down their revenue guidance thrice a year!) seems to be more applicable to Cognizant. 10 years of managing operating margins within a narrow band of 19 to 20 percent is no joke.<br /><br /> <br /><br /> On a slightly different note, may be Forbes should explore doing a story on the correlation between media coverage and business success. Less the column centimers of space that a company gets, the more successful it is. Cognizant and Infosys are two sides of that coin.
on Jul 22, 2009While initially it all sounded like fluff talk, over the years Cognizant has managed to actually prove that they are true to their words when it comes to making promises to the investors and clients. Congratulations for breaking away from the pack.
on Jul 18, 2009While a lot of companies are mortgaging their future for short term gains, it's interesting that Cognizant has taken such a bold step to ensure long term growth. A strategy worth emulating by others who are priding themselves in increasing their margins at the cost of long term growth. Investors need to start long-term growth strategies from companies rather than focusing on their EPS for the next few quarters.
on Jul 17, 2009