Cognizant says winning large and mega deals regularly helping growth

With 24 large deals won last year and four in Q1, Cognizant says its ecosystem for securing mega contracts is key to regaining a top-four global IT services ranking

Cognizant said it has built an ecosystem for consistently winning large and mega deals—one of its stated growth levers—which it believes will help it regain a position among the top four IT services companies globally within the next three years.

 

The Nasdaq-listed firm secured 24 large deals in its last financial year and four more in the first quarter ended 31 March. It has also signed another cost-efficiency deal this month, although it declined to share the value or the sector. Cognizant follows a January–December financial calendar.

 

“What has worked for us is we have rebuilt a virtuous cycle of winning large deals and executed well, which gives us the right to win the next large deal,” said Jatin Dalal, Chief Financial Officer, at the JP Morgan Annual Global Technology, Media and Communications Conference on Thursday.

 

Winning large deals—primarily cost-optimisation contracts in the current macroeconomic environment—is one of Chief Executive Officer Ravi Kumar’s top priorities to help Cognizant re-enter what he calls the “winner’s circle.” These contracts, which are highly contested across the industry, are expected to boost revenue, expand market share and lead to gradual margin growth.

 

Dalal cautioned, however, that the spending environment remains “fairly uncertain,” with sectors such as manufacturing, supply chains, retail, and consumer products more impacted than others. In contrast, BFSI (banking, financial services and insurance) continues to show healthy discretionary spending, which he said bodes well for all service providers.

 

While discretionary spending has remained subdued since the end of 2022—following two exceptional pandemic years—Dalal said this alternating cycle is becoming the norm: two strong years followed by tougher ones. The challenge, he said, is to keep the momentum of large deals flowing during such lean periods to be in a stronger position when client spending picks up.

 

“In alternate cycles of large deals and discretionary spends across sectors, the companies that historically do well are the ones that manage the transition better. The best way to do this in times like these is to keep winning large deals and have a strong backlog. Then, when discretionary spend returns, it sits on top of that backlog. You grow much faster than companies who are not winning large deals in this environment.”

 

Cognizant has lagged behind peers such as Tata Consultancy Services (TCS) and Accenture over the past few years, as its growth slowed, margins compressed, and attrition surged—a sharp contrast to a decade ago when steady growth was its hallmark.

 

To regain momentum, the company is pivoting on three strategies: amplifying talent by upskilling employees for future needs; scaling innovation by focusing on platform-led growth in the AI era; and taking the lead in generative artificial intelligence (Gen AI). Within AI, Cognizant is targeting higher productivity through machine-generated code, industrialising AI capabilities, and deploying AI agents to improve client efficiencies.