Analysts tracking Cognizant's performance have said that the company is yet to see the results of the decisions taken by CEO Brian Humphries, who joined Cognizant in 2019.
“Since the new CEO Brian Humphries joined, the results have not come yet. The company has been plagued with one or the other issue over the past year... but it is still in the initial transformation phase under the new CEO,” said Pareekh Jain, founder and lead analyst at EIIR Trend, as quoted by Business Standard.
Teaneck-based IT services provider Cognizant posted a revenue decline of 2.3 percent to $4.2 billion year-on-year for the quarter ending December 2020. Net income was down to $316 million in Q4 FY20 from $395 million for the same quarter last year.
This decline comes at a time when its Indian peers TCS, Infosys, Wipro and HCL Tech have seen significant growth in the quarter ending December 2020.
This slump was largely attributed to the anticipated exit of large financial services provider in Q4 and Cognizant’s exit from the content service business.
"Cognizant has to quickly overcome barriers of a difficult period which it has been going through for the past year in terms of attrition and ransomware attack, which has dented its image," said DD Mishra, senior research director at Gartner, as quoted by the newspaper.
He further said that the company may have to reorient itself for faster growth trajectory. "We see some endeavours in this direction and we have to wait and watch. Digitisation, transformation and cloud migrations are already happening. The creative destruction of legacy approaches can help Cognizant," Mishra added.
Till a few years back, Cognizant was growing at double-digit even when its peers such as Infosys scaled back after the global economic slowdown.
According to reports, Cognizant grew at the rate of 48 percent between 2004 and 2008 and 28 percent between 2009 and 2013. However, recent times have seen Cognizant’s numbers slump.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
