Revenue gap between Cognizant, Infy falling

- Ex Infy president Ravi Kumar took over as Cognizant CEO

- Cognizant reported $4.8-bn revenues for Dec qtr

- And Infosys posted a revenue of $4.66 bn

- However, Cognizant expecting a tepid growth in March qtr

Bengaluru: Annual revenue gap between Cognizant and Infosys is declining fast as Infosys comes within a striking distance of surpassing Cognizant in turnover terms. While Infosys has emerged as one of the fastest growing IT firms during the pandemic period, Cognizant has lost momentum under its previous CEO.

Sources in the know said that the competition between these two large-tier IT firms is going to be intense as former Infosys' president Ravi Kumar took over as the CEO of Cognizant last month.

Last week, Cognizant reported a quarterly revenue of $4.8 billion for the October-December period. During this period, Infosys posted a revenue of $4.66 billion. However, Cognizant is expecting a tepid growth in its revenue during January-March period as compared to Infosys. The US-headquartered company is expecting its revenue to dip in the range of 1.5-2.5 per cent at $4.71 billion to $4.76 billion in Q1 of FY23. While Cognizant follows January-December financial year cycle, Infosys follows April-March cycle.

As Infosys has guided its revenue to grow by 16-16.5 percent in FY23 (ending March), which translates into around $19 billion. Meanwhile, Cognizant ended its financial year ended December (FY22) with a revenue of$19.4 billion.

"Cognizant has a lot of work to do to accelerate growth. As Infosys comes closer to surpass Cognizant in revenue, the task is cut out for the new CEO Ravi Kumar. But it is safe to say that Cognizant is showing early signs of growth revival with a recent large deal win. So, the competition is going to be intense with former Infosys' president at driver's seat in Cognizant," said a source familiar with the development at Cognizant.

Just within weeks of joining Cognizant, Ravi Kumar and team have announced the signing of a 10-year $1 billion renewal contract with a long-standing client, CoreLogic.

"I am meeting 100 clients in 100 days, and this is a goal which I've set for my own self, so that you get to know the pulse, you get – stay focused on large deals. In fact, I am doing a monitoring of 10 large deals every week, and we are continuing to keep the focus on commercial momentum," Kumar of Cognizant said during the analyst call.

Meanwhile, Infosys won 32 large deals worth $3.3 billion in Q3 of FY23, which was the highest in the last eight quarters.

"We have a very strong large deals pipeline. So, we are feeling good that the pipeline is at a level which is in good shape. We see good traction of large deals, and we have seen more-and-more relevance, connect with our clients on the cost efficiency and automation plays and in the industries where there is economics support, a good traction of Cobalt and the digital transformation plays," Salil Parekh has said during analyst call.

Given the moderation in demand and intense competition among large IT firms to bag large deals, this year will be crucial for redrawing the pecking order, said a source.