Cognizant begins 2nd phase of Chennai expansion

IT solutions provider, Cognizant Technology Solutions (CTS), announced the second phase expansion in Chennai, with an investment of Rs 115 crore.

Construction of the company's second technopark in Chennai is expected to commence in the second quarter of 2004 and will be completed in the fourth quarter of 2005.

The company recently completed the first phase of expansion adding 400,000 sq ft of built up space spread over nine acres at a cost of Rs 115 crore. The new technopark in Chennai currently accommodates 3500 people.

Cognizant officials said that the head count in India will be increased by 4000 during the calendar year 2004. Of this, the Chennai operations will see an addition of 2000 people.

The company will be adding 1200 people in its Pune and Kolkata centres and another 800 to its Bangloare, Hyderabad, US and Europe operations.

The company also expects to open shop in China in the next six months. Discussing the company's plans, R Chandrasekaran, managing director, Cognizant said, "The new development centre will be located outside Shangai and primarily service the company's clients who have interest in China."

There has been a minor delay in opening the China office as the exit options are not very clear. Cognizant would be starting the development centre in China with a head count of around 100.

Further expansion is also in the pipeline for other centres in India. An estimated 100,000 sq ft will be added in Pune in the next 15 months at a cost of Rs 35 crore. In the same time frame, the company also plans to add 120,000 sq ft in Bangalore centre also at a cost of Rs 35 crore.

R Rajagopalan, director and vice president, - finance and administration, Cognizant, said, "While the second round of expansion is underway, we would be taking on lease an additional space of 50,000 sq ft in Chennai to meet our growing demand."

Rajagopalan said with a cash pile of $196 million, all expansion plans would be funded internally. "We would continue to remain a debt free company," Rajagopalan said.

Cognizant reported a 61 percent revenue growth for the calendar year 2003 - from $229 million to $368.2 million, the highest among the top five listed software companies from India. It has projected a revenue growth of 41 percent to at least $520 million for calendar 2004.

About 70 percent of Cognizant's work gets done in India and the remaining 30 percent in the US and Europe at customer locations and near-shore development centers in Ireland, Phoenix and Amsterdam. Cognizant has over 10,000 professionals globally, of which more than 7000 are in India.