According to a TOI report, India’s second-largest IT major, Infosys is likely to reclaim spot 2 from Cognizant in terms of revenue. This year Cognizant lowered its revenue guidance three times.
The reason behind the lower revenue is a reflection of macroeconomic challenges, people-related challenges, and high attrition levels in the US.
Speaking about the revenue protectives, In the September quarter, Infosys had revenue of $4.6 billion. The revenue is just $300 million lower than Cognizant’s $4.9 billion.
There is another point that is a matter of discussion between the two companies which is the growth rates. Infosys grew at 18.8% year-on-year in constant currency in the quarter on the other hand Cognizant’s growth was 5.6%.
Infosys is guiding revenue growth of 15-16% in constant currency for the financial year 2022-23. Cognizant is guiding for a 7% growth in constant currency for the calendar year 2022 (which is also the company’s financial year).
Cognizant saw searing rates of growth under the previous CEO, Francisco D’Souza, during which the company first crossed Wipro in revenue, in 2011, and then Infosys, in 2012. But the growth started slowing in his final years at the helm.
According to the report, the current CEO of Cognizant, Brian Humphries, a former Vodafone executive, replaced D’Souza in April 2019, and since then has undertaken several drastic steps, but that does not appear to have had a salutary impact on revenue.
Kotak Institutional Securities said in a report that Cognizant has ceded wallet share in key verticals. “Loss of wallet share – it is spreading beyond financial services.”
“Cognizant has been losing share to competitors in large banking accounts. The anemic growth does indicate continuing loss of share. The healthcare vertical’s growth has also slowed to 5.5%, while peers continue to grow at a higher rate, indicating a relative loss of wallet share,” it said.
Infosys headcount stood at 3,45,218 as of September 30, 2022, from 3,35,186 in Q1FY23. The net addition of 21,171 people in the first quarter ended on June 30.
Infosys’ attrition in Q2FY23 stood at 27.1 percent. The company’s attrition for the last quarter was 28.4 percent. There is a sequentially fall in attrition on a trailing twelve-month basis.
Cognizant total number of employees stood at 3,49,400 after adding 8,100 employees during the third quarter of this financial year. Its India headcount now stands at 2,55,000 associates, up approximately 12 percent on-year. For the third quarter (Q3) of the CY22 July-September period.
Cognizant reported attrition levels of 29 percent. The company reported 6 percent involuntary attrition in the September ending quarter of FY22, which also includes the sacking of employees due to failed background checks.
