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Cognizant Technology Solutions

Prepared by – Mary Antony

Cognizant started in 1994, as Dun & Bradstreet Satyam Software - the in-
house technology development center for the Dun & Bradstreet Corporation
(D&B) and its operating units. HQ: NJ

Provider of custom information technology (IT) consulting and technology


services, as well as outsourcing services for Global 2000 companies located
in North America, Europe and Asia.

Now:

• More than 47,000 employees


• Maintains P-CMM, SW-CMM and CMMI Maturity Level 5 assessments
• Ranked among Top information technology companies in
o Business Week's Hot Growth Companies
o Forbes Global 2000 list
• Member of the
o NASDAQ-100 Index
o S&P 500 Index.

The Company's core services:


Strategy consulting, complex systems development, enterprise software
package implementation and maintenance, data warehousing and business
intelligence, application testing, application maintenance, infrastructure
management and vertically oriented business process outsourcing (V-BPO).
Revenue segments:

Growth Rates: 2006


Financial Services: 54%

Healthcare and Lifesciences: 88%


Retail Manufacturing and Logistics: 37%

Communications, information services, media and entertainment- 50%

Clients:
Rabobank, Compucredit, ADP, Aetna, Blue Shield, Vauxhall, united States cold
Storage, Orange, France Telecom, Nokia, AMD, Autodesk, Computer
Associates, SAP labs, AC Nielsen

For the complete list domainwise, please refer to company website:

http://www.cognizant.com/html/aboutus/clientList.asp#bfs

Competitors:
1. Infosys Technologies

2. Tata Consultancy Services,

3. WIPRO

4. Accenture,

5. Computer Sciences Corporation,

6. Electronic Data Systems

7. IBM.

Financials:
Snapshot:
Splits:17-Mar-00 [2:1], 02-Apr-03 [3:1], 18-Jun-04 [2:1], 17-Oct-07 [2:1]
Last Trade: Day's Range:
40.02 40.00 - 42.15

Trade Time: 52wk Range:

Oct 19 33.80 - 47.78

Change: Volume:

1.80 (4.30%) 3,876,547

Prev Close: Avg Vol (3m):

41.82 4,366,540

Open: Market Cap:

41.76 11.58B

Bid: P/E (ttm):

N/A 42.08

Ask: EPS (ttm):

42.23 x 600 0.95

1y Target Est: Div & Yield:

51.33 N/A (N/A)


Growth Rates: EPS/Sales/Revenue etc etc:

Note the gradual increase in revenues/eps


Cognizant's 1998 IPO, which raised about $22 million, made it the first IT
company leveraging India to get a listing on the Nasdaq exchange. Analysts
took notice, and by 2004, firms like Gartner, Forrester and IDC were listing
Cognizant among the leading IT services providers. The firm's financials
certainly are attention-getting, with an average annual earnings growth rate
of nearly 70 percent in the three years leading up to 2006. In fiscal year
2005, the firm's revenue came in at $886 million, up 51 percent over the
previous year. At this rate, it's no surprise that Cognizant's revenue topped
$1 billion in 2006. Its headcount also has skyrocketed to more than 40,000 in
2006, after the firm hired a record 14,500 employees that year.

Wall Street loves Cognizant: In early 2006, The Wall Street Journal named
the firm one of the best five-year stock performers in its Shareholder
Scoreboard, while Institutional Investor named Cognizant one of the most
shareholder-friendly companies in America in its listing of the top
shareholder-friendly companies. Moreover, Investor's Business Daily named
the firm Best in Group for overall and fundamental stock performance in
computer tech services. Since 1999, Cognizant has placed among the top
tiers of Forbes' list of the 200 Best Small Companies, becoming the top-
ranked technology company in 2005. And if that's not enough, the firm also
has been named five times to BusinessWeek's annual Hot Growth ranking,
also landing on Business 2.0's 100 Fastest-Growing Tech Companies. The firm
is well liked in India, too, picking up the Best U.S. Company in India award in
2005 as part of the first Indo-American Corporate Excellence (I-ACE) Awards
instituted by the Indo-American Chamber of Commerce (IACC). The award
honored Cognizant's financial performance, human capital development,
corporate social responsibility and contribution to Indo-U.S. business.

Latest Developments

Cognizant to acquire marketRx for $135 mn


20 Oct, 2007

Cognizant Technology Solutions, an IT and BPO services company, said it will


pay $135 million in cash to acquire New Jersey-based marketRx, a provider of
analytics and related software services to life sciences companies.

Cognizant Eyes Buys In Europe, US


Sep 2007

According to the company's Vice-Chairman Lakshmi Narayanan, Cognizant


Technology Solutions Corp. is seeking acquisitions in Europe and the US. "We
are looking at specific opportunities in the consulting end in certain
geographies where we are not operating," said Narayanan. Though the
company did not specify the targets it was in discussion with, it mentioned
that it is eyeing consulting firms in Europe and the US.
May 2007:

Cognizant And Ordina Enter Into A Major Outsourcing Arrangement With


Rabobank. Ordina: one of the fastest-growing and largest services providers
in consulting, ICT and outsourcing in the Netherlands and Belgium. Cognizant
and Ordina will collaborate to deliver outsourced services as part of a seven-
year arrangement with Rabobank Group, encompassing application design,
development and testing services. As a key partner in this arrangement,
Cognizant will manage the onsite/offshore delivery of services.

Cognizant Plans to Set Up Fully-Owned Techno-Complexes


Aug 2007

Cognizant Technology Solutions Corp. has announced plans to invest an


additional $100 million in India. The company had earlier announced an
infrastructure expansion programme across the country at a cost of $200
million. It plans to set up fully- owned techno-complexes at Chennai,
Coimbatore, Hyderabad and Kolkata.

Cognizant Technology Solutions Corp. Provides Earnings Guidance


for the Third Quarter of 2007 ; Revides Earnings Guidance for the
Full Year of 2007

Aug 2007

Cognizant Technology Solutions Corp. provided earnings guidance for the


third quarter of 2007. For the quarter, the company expects earnings of 56
cents per share on $550 million in revenue. Excluding stock-based
compensation expenses, the company expects 62 cents per share. The
company revised earnings guidance for the full year of 2007. For the year,
the company now expects earnings of $2.20 per share, up from a May
projection for earnings of $2.13 per share. Excluding certain expenses, the
company raised its full-year earnings forecast to $2.40 per share, up from
previous guidance for earnings of $2.34 per share. The company expects
revenue of $2.11 billion, up from previous guidance for $2.07 billion.

Cognizant Signs A Five-Year, Multi-Million Dollar Agreement With


Kimberly-Clark
January 16, 2007
has signed an IT applications outsourcing agreement with Kimberly-Clark
Corporation (NYSE: KMB) covering an array of SAP® and customized software
applications, including strategic planning, product management, supply chain
planning and execution, sourcing, sales and marketing, data exchange and
compliance, enterprise management and customer management.
Under the agreement Cognizant will deliver a broad range of IT applications
services to Kimberly-Clark across various locations in North America, Europe,
India and Latin America. Cognizant will also leverage its relationship with SAP
and experience in delivering large-scale, global SAP applications projects.
Through this approach, Cognizant will help Kimberly-Clark transform its IT
footprint, reduce costs and drive new IT-based capabilities.

Sept 2006:

Cognizant acquired AimNet Solutions, Inc. (AimNet), a managed


infrastructure and professional services firm. With the AimNet acquisition,
the Company provides service capability in network operating
centers (NOCs) in North America and India. It focuses on key areas of
infrastructure management, such as networks, servers, middleware, security,
vendors, storage, messaging, databases and desktops.
Cognizant Acquires IT Services Firm Infopulse in The Netherlands as
Part of European Expansion
December 2, 2003
CTS’s acquisition of Infopulse, a Netherlands-based IT services firm
specializing in the banking and financial services industry. The Infopulse
acquisition allows Cognizant to better serve customers in the Benelux region
by adding local client partners, industry expertise, and local language
capability. The acquisition further strengthens Cognizant's industry leading
4th generation offshore delivery model, which has senior executives based
close to clients in the US and Europe who are tightly integrated with a robust
SEI CMMI Level 5 offshore capability.
"Infopulse has the client base, industry expertise and knowledge of local
markets to spearhead our strategy for Benelux," said Kumar Mahadeva,
Chairman and CEO of Cognizant. "Customers in banking and financial
services, have been among the first European companies to adopt a large
scale offshore strategy, and Infopulse helps Cognizant further strengthen its
position in this vertical."
"This acquisition will help our current customers because they will get large
scale offshore capabilities as well as industry specific IT services," said Wiljo
Verbruggen, co-founder of Infopulse, which has for several years leveraged
offshore development in Eastern Europe. "Cognizant has a strong track
record in the financial sector and also values customer focus, has very high
customer satisfaction, and a culture that provides an excellent balance
between business and technology."

Interesting news item:


Every 1% appreciation of the Indian rupee dents Cognizant's operating
margin by about 0.2 percentage points, according to a recent filing with the
Securities and Exchange Commission. That is the lowest among the
India-based IT services providers, says Moshe Katri, an analyst with Cowen.
Infosys, for example, takes a hit of 0.4 percentage points for every 1% gain
the rupee makes against the dollar.

Cognizant Culture:
Excerpts from a former employee of CTS about the supposedly “pro-tamil”
culture

Pro tamils ... not in the lower levels.. it was in the C-level ... some time ago..
when lakshmi was runing a show in Chennai after Dsouza took over.. its
waned a bit. Lot of managers one rung below laskhmi were all tamils ( but
they were all real studs) i know some of them in person...
I can vouch for cognizant anytime. about the work culture... Iam not
generalizing here.. but its a very proven fact that you would enjoy working
for cognizant if you are working under a PM who has been with cognizant
throughout his career ... the culture is very internal to CTS.. but if you
happen to be working under a LATERALLY entered PM from other companies
like Satyam, Accenture.. they could be a PITA.... I worked with great
managers ( ok... mostly joined from TCS at a very early age ) i had classy
fellows to derive inspirations from

Locals wanted

On its web site, Cognizant outlines career opportunities available to students


as well as experienced staffers. The firm hires "mostly from India," says a
source, and this leaning is reflected on the careers pages of its site, which
outline opportunities to work with the firm in its home country, in addition to
some opportunities at client sites in the U.S. and Europe.

An Indian flavour

As a firm with deep ties to India, Cognizant can be a culture shock to some. "I
have worked in the Indian and U.K. operations (I am not Indian) and I feel the
culture is not very inclusive to non-Indians. It is also affected by the turnover
of staff and the evident lack of people focus," one insider grumbles.
Regarding turnover, the firm states that, on an aggregate basis, Cognizant's
turnover rates are in line with industry norms, at approximately 16 percent
for 2006. Another source characterizes the firm's culture as "aggressive,"
noting that "one can expect very challenging assignments at early stages of
one's career."