Knowing the Eyes is the location among the four largest IT service companies in the world

Cognizant Technology Solutions Corp., two years after capturing the decline in revenue, aims to place it among the world’s four largest IT service companies, including Accenture Plc, Tata Consultancy Services Ltd, Capgemini SE and Infosys Ltd, which will be the 27th fiscal year for FY27.

On Tuesday, as part of the annual investor meeting, Cognizant shared a four-point strategy under which it will seek to increase its profitability, gain market share, focus on big deals, and ensure revenue growth is in line with the world’s top four IT services companies.

“We want to be the winner circle by 2027,” said Cognizant CEO S. Ravi Kumar. “We define the winner circle as being a top player.”

He added that the Nasdaq-listed companies aim to achieve this by expanding innovation, focusing on more platform and grassroots innovations, and using AI to accelerate growth through productivity and AI agents.

Read more: How Accenture leads Indian IT companies with big deals

“The winner’s circle has nothing to do with top revenue growth. We want to gain market share. We want to maintain a huge trading momentum. We want to provide skills for the future. We want to gradually expand profit margins.”

Cognizant’s chief financial officer Jatin Dalal repeated the company’s request for increased profit margins a few hours later.

“In the external years (except FY25), we believe we can offer another 10 to 30 base margin expansion,” Dalar said.

The Teaneck, NJ-based Cognitive Program increases profit margins by 30 basis points per year until based on improved utilization, focusing customers on outcomes, increasing share of managed services and increasing productivity through AI integration.

This is one of the rare cases in the last two years, with the company deciding to increase its operating margins and revenue at the same time.

Looking to the future

At least one analyst cheered on cognitive forward-looking plans.

“We believe that it includes the recently generated AI demand, including the recently generated AI demand, including the recently generated AI demand,” said Keith Bachman, an analyst at BMO Capital Market in a note on March 25.

These muscle projections carry a little salt. Although Vision ended its 4% increase in revenue in 2024 with $19.7 billion, the company still couldn’t publish organic growth, that is, after violating its recent acquisition of Belcan and Thirdera.

This lack of organic growth is a decline in revenue for a year.

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Thankfully, the company’s operating margin was as high as 14.7%, an increase of 80 basis points from the previous year. This is due to reduced employee costs, as the company cut its employees by about 10,900 last year.

“CTSH’s renewed focus is on large and large transactions, coupled with AI to drive the productivity of the technology and share it with customers and, where possible, with suppliers, and in our opinion, the strength of Indians’ competitive in close to middle term can increase the strength of Indians’ competitive in the March titled “The desire of tall men in a challenging demand environment”.

Kumar, 53, took over as CEO of Cognizant in January 2023 with a mission to turnaround the company. His first year was bad as the company ended in December 2023 and its full-year revenue fell. In his second year, the company grew, albeit on the back of the acquisition.

Kumar’s operating margin for two years in the company’s tenure is not well reflected. At the end of 2022, the company reported a profitability of 15.3%. It fell to 13.9% the following year and jumped to 14.7% by the end of 2024.

Peer lag

Questions have also been raised about its growth. Cognizant has lagged behind his peers Accenture, TCS and Infosys over the past two years. Although Cognizant reported a decline in revenue in 2023, growth rates last year were lower than Accenture and TCS.

Accenture grew 4% last year to $64.1 billion, while TCS rose 4.1% to $29.1 billion. Last year, Bengaluru-based Infosys grew 1.9% to $18.6 billion.

To be sure, Accenture follows the September-August financial calendar, recognizes the January 12th financial calendar, and Indian IT services companies follow the April-March-March financial calendar.

For the ongoing January-March quarter, Cognizant is expected to receive $500 million in revenue and $2.03-20.8 billion for the full year. On an organic basis, the company expects revenue growth of 1-3.5% in 2025 for constant currency maturity despite increased unnecessary spending by customers.

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Despite this, shareholders still have confidence in Kumar. Since taking over in January 2023, Cognitive Shares has risen 26.7%. By comparison, Capgemini’s share price fell 10%, Accenture’s share price rose 9.3%, and TCS’s share price jumped 9.7% to 9.7%. ₹3,667 per piece.

Investor Day’s speech was reportedly in a few weeks after activist investor Mantle Ridge raised its stake in IT Services Company to $1 billion.