COGNIZANT TECHNOLOGY SOLUTIONS: Growth Ahoy

Looking at Cognizant's financials over the years, one thing that is

impressive is its striking growth figures. Keeping with that trend, FY 2004-05

saw Cognizant moving a step closer to the Top 10 league with a spectacular

growth of 80%. Globally the company posted a 54% growth, and had a head count of

17,050 with 77% of its employees based out of India. Let's take a closer look

at the growth drivers. Growth came from key verticals-banking (49%),

healthcare (20%), manufacturing, and retail (9%). Net profits increased globally

by 64%. Its operating margin remained stable at 20%. On the HR side, the company

added 6,500 professionals during the fiscal and, interestingly, 60% of the hires

were freshers, through campus recruitments.

During the year Cognizant added 100 customers, taking the customer roster to

233. The company says that of its 233 customers, 53 are categorized as strategic

customers who have the potential to generate revenues of $5 mn to $40 mn on an

annual basis. For the year ended March 2005, Cognizant's top 5 customers

contributed about 35% to the kitty.

HIGHLIGHTS Set up a new development center in Shanghai to service global customers Multi-year relationship with Pfizer Global Research and Development (PGRD) to provide high-end BPO in clinical data management and biometrics Was added to the Nasdaq 100 Index Sustained growth globally despite a strong anti-outsourcing lobby in 2004 Maintained a growing presence in the European markets Huge intake of freshers over the year puts domain expertise in question Needs to sustain its huge HR pool in the coming years with rising costs l President & CEO: N Lakshmi Narayanan l Start-up Year: 1994 l Products & Services: Software Services l Branches: 5 l Address: 226, Cathedral Road, Chennai-600086 l Tel: 28113063 l Fax: 28112507 l Website: www.cognizant.com

Yet another significant development over the year was Cognizant's European

presence. For the quarter ended march 2005, its European revenue was 13%, up 60%

y-o-y. The company claims that it is winning strategic European clients who are

seeking to leverage its application development and re-engineering services. To

tap the European market further, the company acquired Netherland-based Infopulse,

a niche financial services consulting firm with around 45 professionals. Says

the company's CEO Lakshmi Narayanan, "This acquisition has given us a

strategic advantage to penetrate Europe as these professionals, who are

predominantly locals, have a good understanding of the marketplace and the

knowledge of the local language, which are very critical factors if you want to

service the European marketplace".

The company made yet another significant decision by foraying into China,

where it has taken a 25,000 sq ft office space in Pudong IT Park in Shanghai,

and by end of 2005 it expects to have 50 professionals there.