Nasdaq-listed Cognizant shows growth stability under CEO Ravi Kumar

Cognizant’s strong third-quarter performance — marked by higher growth and a sharply raised revenue guidance — signals that the US-based IT firm is stabilising after years of turmoil. With this momentum, Cognizant is now poised to widen its lead over Infosys by nearly a billion dollars, reversing a trend that had seen the gap between the two narrow sharply over the past few years.

 

Just three years ago, Infosys had almost caught up, reducing the revenue difference from $3 billion to just a few hundred million dollars. But Cognizant’s revenue at the end of its fiscal year (December 2024) stood at $19.7 billion, compared to Infosys’ $19.28 billion for the year ended March 2025 — and that gap is now set to grow.

 

The Nasdaq-listed company, once a bellwether under its first CEO Francisco D’Souza, had stumbled in recent years under Brian Humphries, struggling with high attrition, leadership churn, slowing deal wins, and stagnant growth. The turnaround under CEO Ravi Kumar, however, appears to be gathering steam as the company regains market share, sustains large-deal momentum, and gradually expands margins.

 

Cognizant has raised its revenue growth guidance for FY25 to 6–6.3 per cent in constant currency, up from the earlier 4–6 per cent range, driven by increased client spending to modernise digital infrastructure with AI-led solutions. Growth has been broad-based across business segments and geographies.

 

“This is a genuine turnaround story for Cognizant under Ravi,” said Phil Fersht, CEO of HfS Research. “The company has moved from a period of drift to a clear growth trajectory, improving margins, leadership confidence, and client engagement. Ravi has rebuilt Cognizant’s execution rhythm, stabilised delivery, and re-energised the culture around purpose and performance. The result is a company that is now competing aggressively with Infosys and TCS rather than playing catch-up.”

 

Analysts attribute the turnaround to focused investments in AI productivity and automation tools, improved delivery efficiency, large-deal wins, and a deeper wallet share in key verticals such as healthcare, BFSI, and life sciences. The company is also shifting gradually towards outcome-based and transaction pricing models, strengthening operational discipline, and protecting margins.

 

“Cognizant is proactively targeting CFO spend of business processes in addition to the typical CIO spend by bundling services. This aligns with clients’ priorities around agent-based delivery of business processes. It is also selectively investing in large GCC opportunities,” said Yugal Joshi, partner at Everest Group.

 

Still, challenges remain. Analysts cautioned that Cognizant must accelerate growth further and lift its operating margin from the current 15 per cent closer to 20 per cent to match peers. Despite a 16 per cent rise in its stock price since Kumar took charge, the share trades roughly at 2019 levels, with a P/E ratio of 14.5 — well below those of TCS, Infosys, and Accenture, which hover above 20.

 

“Cognizant is a Tier-I company in terms of revenue, but Tier-II when it comes to margins,” said another analyst. “When margins are low, you need to leverage that for higher growth. And if 30 per cent of your code is being written by machines, your revenue per employee should reflect that — otherwise, it suggests most of the efficiency gains are being passed on to clients.”