Cognizant\'s acquisitions to strengthen digital offerings

HYDERABAD: Cognizant, one of the world's leading professional services companies, is looking at acquisitions in the next six months as it seeks to expand its presence in digital technologies.

"We will continue to look for opportunities on the M&A front. We bought several companies last year. This year too we expect to have some movement on this front," Rajesh Nambiar, executive vice-president, chairman and managing director of Cognizant India, told Deccan Chronicle on Thursday, after announcing the company's second quarter results.

It has forecast a 100 basis point growth in revenue through the inorganic contribution.

In 2021, the company had spent $970 million on acquisitions, while the year before it had used $1.12 billion to fund its inorganic growth strategy.
According to Nambiar, the company would be looking at further strengthening it's digital portfolio through the acquisitions.

"Going forward, all our service offerings could have a digital element," he said, laying emphasis on the company's digital strategy.

During the April-June quarter, the company reported a seven per cent growth in revenue at $4.91 billion compared to $4.58 billion in the year-ago period. This year for the second consecutive quarter 50 per cent of Cognizant’s revenue have come from their digital business.

Despite unprecedented labour market conditions in the technology space, Cognizant has reported a healthy growth of 30 basis points in operating margin.
"In a period of unprecedented labour market conditions characterised by elevated attrition and significant wage inflation, we focused on our client commitments and delivered balanced financial results in the second quarter," said Brian Humphries, Chief Executive Officer.

"As we position the company for sustained success, we will continue to invest in our talented employees, our clients and our capabilities," he said.

At the end of the April-June quarter, the company had 3,41,000 employees on its rolls. During this period, the company had seen a 31 per cent voluntary attrition, caused mainly due to an industry-wide talent shortage seen since the Covid pandemic.

Nambiar said the company has been taking several initiatives to stabilise attrition. As part of this, the company had promoted 33,000 employees and is planning to hire 50,000 freshers through campus recruitment.