Cognizant Technology Solutions Corp
Cognizant Technology Solutions CorpReuters

Cognizant Technology Solutions, which carries out a major part of its global operations from India, reported 20 percent growth in revenues for the first quarter ending March, while its top Indian rivals posted disappointing earnings during the same period. 

Its revenues stood at $2,911 million for the March quarter, 20 percent higher on year-on-year basis.

The US-based IT software services company recorded 9.7 percent increase in profit at $382.9 million during the quarter, strengthening the view that it remains insulated from the concerns that plague Indian firms such as Tata Consultancy Services (TCS) and Infosys.

The $10-billion company saw strong expansion in revenues because of top-spending clients in the US such as JP Morgan Chase, besides an increased spending by healthcare firms.

"We had another great quarter and a solid start to 2015. Our sequential growth was well ahead of our previous guidance and was driven by strong organic growth in our core business coupled with solid inline performance in the TriZetto business," Cognizant CEO Francisco D'Souza told The Economic Times.

The company, which employs a major chunk of its global workforce of 211,700 in India, raised its revenue growth outlook for 2015 to 19.3 percent and has forecast a 3.4 percent increase in revenue for the second quarter on sequential basis.

"For them, the fact that they have managed to attract discretionary spending from top clients has been a key differentiator -- they've captured more discretionary spending than peers," said Sandra Notardonato, vice-president and research analyst at Gartner.

Cognizant's 2015 revenue forecast in constant currency terms is far above industry body Nasscom's estimate of 12-14 percent growth for India's $146 billion outsourcing industry.

"This strong show (hopefully) allays concerns on the state of demand that formed in the wake of a poor earnings season from peers," JPMorgan analysts Viju George, Amit Sharma and Tien-tsin Huang wrote in a post-earnings note to clients.

Domestic IT majors such as TCS, Infosys, and Wipro failed to meet analysts' expectations of revenue growth for the quarter ending 31 March. Currency fluctuations and weakening demand, which weighed on their revenues, raised concerns of a decline in momentum in the Indian IT industry.