Cognizant's 8-10% rev guidance to lift Indian IT spirit: IIFL

Cognizant's board has also approved a plan to return USD 3.4 billion of capital through dividends and share repurchases over next two years.Below is the transcript of Sanjiv Bhasin’s interview to CNBC-TV18’s Kritika Saxena. Q: What do you make of the numbers and in particular what do you make of the next year guidance of 8-10 percent? A: Very positive to start off with. Given the gloom and doom on the IT sector, this should be a silver lining. Also the company is very prudent in announcing a buyback which they feel that the stock would have been undervalued.

So, it is a confidence rebuilding step. Since Cognizant is not listed in India, we hope that the Indian IT sector again starts to look at these cues. So, for us it is a positive. It is the first silver lining in the entire IT belt. The buyback gives you a lot of colour that the management is looking to increase the shareholders return on equity. Q: Would you be disappointed that they are not expecting a significant acceleration of growth, perhaps a 10 percent plus growth in the coming year? A: Given the headwinds which they are facing I think even 8-10 percent would be a reasonable call. All the IT sector comes from a very large base. We have been used to double digit growth extensively quarter on quarter and now we are coming down to on a yearly guidance. I think we will take it with a pinch of salt. The company has generally under promised and over delivered just like in Infosys. I think it is a very reasonable guidance.