13 | Cognizant Technology Solutions: Re-Investing Pays

Cognizant continued on its high growth mode for the third successive year.
Globally the company posted revenue growth of about 50%, and net profit zoomed
by 71%.  From the business side of
things, the company strengthened its circle of offerings under business
technology consulting, ERP, CRM, data warehousing, and business intelligence. On
a solution wise basis, the company recorded strong growth across domains like
testing, ERP, CRM and KPO. According to the company, during the JFM quarter, ERP
and CRM grew by 100%. It was 10% of the revenue.

Cognizant has consistently maintained that one of the keys to high client
retention is re-investing. Anything in the range of 20% is re-invested back into
business to nurture areas like client relationship, data analytics, and domain
expertise.

A segment wise look at the revenues puts BFSI in the pole position at 49%,
followed by manufacturing, retail, and healthcare. Meanwhile, top 5 customers'
contribution to the overall revenues stood at 32%. During 2005-06, the company
added about 20 strategic customers. Cognizant defines strategic customers as one
with the potential to grow annualized revenues of $5mn to over $40 mn. Cognizant
has around 72 strategic customers.

As clients increasingly wanted a broader range of services, and business was
expected to grow at a healthy rate, Cognizant's headcount grew rapidly. The
global headcount also soared and stood at 26,748 at the end of the fiscal, with
a big chunk happening in India.

The company completed its new training facility in Chennai that can take
2,000 people across 75 classrooms. The company added close to 7,800
professionals in India, over the fiscal. The future remains bullish for
Cognizant, which has projected a revenue growth of 47% to at least $1.3 bn for
calendar year 2006.