Thanks to a strong show by the healthcare vertical, Nasdaq-listed IT services major Cognizant beat Street expectations on Monday to post a 9.7 per cent year-on-year (y-o-y) increase in its net profit for the March quarter to $382.9 million. It also raised its annual revenue growth guidance marginally, to 19.3per cent.
The IT major’s encouraging earnings come after a series of disappointing performances by its Indian IT peers.
Higher spend by financial and healthcare clients in North America enabled Cognizant to grow net profit by 5.5per cent sequentially. Revenue touched $ 2.91 billion in the first quarter of 2015, up 20.2per cent from the corresponding quarter last year. In February, the company had forecast a March quarter revenue of $2.88 billion.
The IT major now expects June quarter revenue to be at least $ 3.01 billion. The company had finished 2014 on a strong note, crossing the $10-billion revenue mark, and had given a 19per cent growth guidance for 2015.
Revenue in the healthcare business, which accounts for nearly a third of Cognizant’s total income, soared 43per cent to $879.1 million in the first quarter. From North America, it garnered 78 per cent of its revenue, or $2,292 million, during the quarter.
Francisco D’Souza, chief executive officer of Cognizant, said ,”The investments we have made in digital, automation, utility-based delivery models, consulting and industry-specific expertise are clearly paying off.”
IT majors like Infosys, Tata Consultancy Services and Wipro had recorded below-par results, hit hard by currency volatility. Gartner had given out a not-so-promising outlook for global tech spend and had predicated it to fall by 1.3 per cent.
But Cognizant has bucked that trend. FE