Increased spending by clients in North America and Europe helped software solutions provider Cognizant Technology Solutions meet its first quarter revenue target of $2.42 billion, an increase of 19.9 per cent compared with the quarter ended March 31, 2013. Its profits grew 22.8 per cent to $348.87 million.

An uptick in business from financial services and healthcare firms in the US and European markets helped Cognizant keep up its growth momentum. North American clients have raised their IT spends by 16.1 per cent year-on-year, according to a press release.

The New Jersey-headquartered company services large US corporations such as JPMorgan Chase, insurance firms The Hartford, and healthcare services company Cigna.

Cognizant recruited 7,200 during the January-March 2014 period, taking the total to 1,78,600. “Strong ramp up in hiring during the quarter positions us to service the healthy demand environment that we anticipate this year,” said Karen McLoughlin, Chief Financial Officer, in a press statement.

Q2 revenue forecast It also reaffirmed its annual revenue prediction of $10.3 billion, a 16.5 per cent increase over fiscal 2013. For the second quarter of this fiscal, revenue expectations are around $2.53 billion.

Sanchit Gogia, Founder and Chief Executive officer, Greyhound Research, said Cognizant’s entry into the digital technology space was early compared to its peers, helping it consolidate its position in the market.

Efforts in building a strong second tier of management have also bolstered the company’s image among clients.

The Indian market, though a small portion in revenue terms compared with 84 per cent taken by the US and Europe, offers unique opportunities, said Venu Reddy, Director, IDC India.

“The potential for cloud and mobility solutions are quite good; now that the elections almost over, the market is turning from cost-control to chasing business values.”

With any Western client, Cognizant manages only 25-30 per cent of the processes through an employee stationed at the client location, while the rest are executed at its eight delivery centres across the country.

The company employs 1.3 lakh people in India, who handle a diverse set of operations from outsourced business processes to running critical applications on the cloud.

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