Cognizant India's profit falls 40%, revenue dips 5% in FY21: Tofler data

Cognizant Technology Solutions India Private Limited reported a 40 per cent fall in profit from the previous fiscal, and expenses rose by 6.5 per cent, according to financial data accessed by business intelligence platform, Tofler. 

Revenue for the financial year 2021 was Rs 29,682 crore, a fall of nearly 5 per cent from the revenue in the previous year. 

Profit after tax fell 40 per cent to Rs 3,265 crore during the fiscal year. The company’s total expenses for the fiscal were reported as Rs 24,982 crore, up from Rs 23,452 crore in the previous year.

The Nasdaq-listed, New Jersey-based information technology services firm has a sizable workforce in India, and has been grappling with high attrition over the past year. 

The IT major also revised its financial year guidance to 10.2 per cent to 11.2 per cent or 9 per cent to 10 per cent on a constant currency basis. It had guided for a growth of 5.5 per cent to 7.5 per cent for CY21 in Q1. 

It reported full year 2020 revenue of $16.7 billion, include the impact of the anticipated exit from a customer engagement and the exit from certain content services.

Quarterly attrition rose to 31 per cent in the quarter ended June 30, and the firm said it is looking to hire 100,000 lateral hires, along with thousands of people at the graduate level this year. 

In the second quarter (Cognizant follows January-December cycle) the company said that its voluntary attrition touched 29 per cent on an annualized basis and 18 per cent on trailing 12 months basis (LTM). The company stated in its analyst call that it is ramping up its hiring and skilling mechanism.

However, Rajesh Nambiar, President - Digital Business & Technology and Chairman, India at Cognizant, told Business Standard in July the company was taking several steps to retain talent, and hire freshers as well as laterals. 

The firm also expects to do better this year, with bookings seeing a 12 per cent growth in the second quarter.

Two weeks ago, Cognizant in the US reached a $95 million settlement to resolve a lawsuit accusing the IT firm of defrauding shareholders by concealing bribes to officials in India, Reuters reported. 

“The statutory filings in India are not representative of the company’s overall performance. Cognizant has reported a record setting second quarter; highest ever quarterly revenue at $4.6 billion; the largest-percentage quarterly growth since 2015, up to 14.6 per cent; and the company beat Wall Street expectations and increased revenue and earnings per share guidance,” Cognizant said in a statement.