Cognizant in Rs 340 crore expansion

Cognizant Technology Solutions, the Rs 2,700 crore Nasdaq-listed software services company, has announced a Rs 340 crore expansion plan to be taken up over the next two years.

Part of the second phase of its India construction programme during 2005-2006, the investment will be channelled into expanding its development centres in Bangalore, Chennai, Pune and Kolkatta.

Bangalore will play a strategic role in this expansion plan, attracting Rs 130 crore of the investment, housing a techno-complex with capacity to accommodate 2,250 developers.

Currently, Cognizant employs close to 1,000 professionals in Bangalore. The new campus is expected to be ready by end-2005 by which time the company plans to add another 1,000 developers.

Said Lakshmi Narayanan, president & CEO, Cognizant, "As we expand our services and move up the IT value chain to increasingly look at high-value services, Bangalore will play a critical role in our endeavour.

For Cognizant, Bangalore is the global centre of excellence for advanced solutions using new technologies, Customer Relationship Management (CRM) and IT infrastructure services."

Cognizant, in addition to this, has also bought 10 acres of land in the Electronic City for future expansion, plans for which will be drawn by the second half of 2005.

In all, the fresh expansion plans envisage an addition of over 8,000 professionals. Part of the investment will go towards construction of a 100,000 sq ft training centre, Cognizant Academy in Chennai, with the capacity to accommodate 1,000 people at any time.

On the dynamics of software services, Narayanan said: "The pressure on wages is increasing in India while in the US it is in the low single digits. Our onsite-offsite ratio is 30:70 and hiring of mid-level managers is an area of concern here. This is one of the reasons for us to step up our consulting work which brings in high-value."

Cognizant for 2005, has given a revenue guidance of $845 million (Rs 3,800 crore), which will be 44 per cent up on 2004 revenues of $586.7 million (Rs 2,640 crore). The company currently employs 15,300 professionals and plans to end 2005 with a total headcount of 22,500.