Bangalore, 6 September Cognizant Technology Solutions Corp, a leading provider of software development services, has not seen any impact on its outsourcing business from the US subprime mortgage crisis, a senior official said today.
Cognizant was performing well, and, based on signals from its customers, it did not expect financial market problems to pull the US economy into recession, vice-chairman Lakshmi Narayanan told reporters at an industry conference.
“Given all the parameters that we have, there is clearly no sign of any demand slowdown. In fact, the demand is catching up in some of the new areas like Europe,” he said.
Narayanan said the US-based company’s exposure to the subprime sector was insignificant, and said a recession in the US, a major market for the firm, seemed unlikely.
“At least the customers that we have spoken to there are not preparing for one. The plans they are making are on the basis that they will continue to grow and that they are part of a growth economy,” he said.
“So, to that extent, we don’t see signs of any recession there.” Last month, India-based outsourcing firm WNS (Holdings) Ltd lowered its fiscal 2008 outlook as work stopped coming from US mortgage lender First Magnus Financial. Bangalore-based iGate Global Solutions Ltd, a mid-sized outsourcer, has seen its income from US mortgage companies drop to 7% of its revenue in the June quarter from more than 10% in the December quarter.
About 75% of Cognizant’s 46,000 workforce is in India, and it would continue to invest in the country.
“We need capacity and infrastructure here in India which is where we are investing close to $300 million over the next couple of years,” Narayanan said.
The company faces increasing competition from bigger rivals such as International Business Machines Corp, Electronic Data Systems Corp and Accenture Ltd, which have beefed up their presence in India.
It also competes with Indian software services firms such Infosys Technologies Ltd , Wipro Ltd, and Tata Consultancy Services. REUTERS