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Cognizant net jumps as software clients use India
New York, July 23: Software services supplier Cognizant Technology Solutions Corp. on Tuesday said profit jumped 57 per cent in the latest quarter and that it had raised its outlook for the full year, sending shares up nearly 14 per cent.
New York, July 23: Software services supplier Cognizant Technology Solutions Corp. on Tuesday said profit jumped 57 per cent in the latest quarter and that it had raised its outlook for the full year, sending shares up nearly 14 per cent.
Cognizant said it expects profit margins to remain stable through 2004, as U.S. and European clients keep rushing to low-cost software developers based in India.
"If anything, the demand is stronger than it was five or six months ago if we look at the pipeline," Chairman and Chief Executive Kumar Mahadeva told Wall Street analysts in a conference call, citing pent-up corporate demand for its services.
The high level of repeat business from corporate clients allows Cognizant to confidently predict at least 80 per cent of sales for the next three quarters, Mahadeva said.
"If anything, the demand is stronger than it was five or six months ago if we look at the pipeline," Chairman and Chief Executive Kumar Mahadeva told Wall Street analysts in a conference call, citing pent-up corporate demand for its services.
The high level of repeat business from corporate clients allows Cognizant to confidently predict at least 80 per cent of sales for the next three quarters, Mahadeva said.
As the technology slump lingers, some U.S. programmers and politicians have complained that Cognizant and its Indian peers are driving down wages and costing thousands of jobs. But investors dismissed any such concerns, propelling Cognizant shares to near-record levels.
Cognizant, the former software development arm of financial information provider Dun & Bradstreet, ranks among the top five suppliers of Indian-based software development and maintenance services along with names such as Infosys, Wipro and Tata.
Bureau Report