Infosys Set to Reclaim No.2 Spot as Quarterly Revenue Surpasses Cognizant

Infosys Ltd is about to regain its position as India’s second-largest IT services company, 14 years after losing it to Cognizant Technology Solutions. In the latest quarter, Infosys reported a 3.8% rise in revenue, reaching $4.894 billion for the September quarter. Meanwhile, Cognizant, which follows a different fiscal year, expects revenue between $4.89 billion and $4.94 billion for the same period. Their final numbers will be confirmed when Cognizant reports earnings on October 30.

Cognizant, though headquartered in New Jersey, is often considered an Indian-origin IT firm, with three-quarters of its employees based in India. It overtook Infosys in 2012 to become the second-largest IT services provider in India, behind Tata Consultancy Services (TCS).

However, Infosys is now poised to reverse this, thanks to its transformation under chairman Nandan Nilekani and CEO Salil Parekh. Cognizant, on the other hand, has faced challenges, including leadership changes—three CEOs in the past seven years—which have slowed its growth.

Infosys’s consistent quarterly growth rate under Parekh stands at 2.12%, while its profitability has decreased slightly by 320 basis points. In contrast, Cognizant has grown at a much slower rate of 0.91% per quarter, with its operating margin dropping by 260 basis points.

Despite this, TCS remains the largest IT firm in India, ending FY2024 with $29.1 billion in revenue. Cognizant closed the year with $19.35 billion, followed by Infosys with $18.56 billion.

Infosys has projected growth of 3.75% to 4.5% in constant currency for the current fiscal year. Cognizant, meanwhile, expects full-year revenue to be between $19.3 billion and $19.5 billion.

Since 2018, Infosys’s market value has surged by 270%, closing at $97.3 billion on Thursday. Meanwhile, Cognizant’s market value has grown by just 4% during the same period, reaching $38.46 billion.