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Analyst Blog

Recently, Cognizant Technology Solutions Corp. (CTSH - Analyst Report) opened a development center in Singapore. The decision was taken with the sole intent of business expansion in one of the wealthiest countries of the world.

The center was inaugurated by two eminent personalities: the Assistant Managing Director of the Singapore Economic Development Board, Yeoh Keat Chuan and the Deputy Chief of Mission at the U.S. Embassy in Singapore, Louis Mazel.

The development center spreading across 30,000 square feet, is at a prime location, the Changi Business Park. Nearly 370 people will form the work force for Cognizant at this center who will use the Cognizant 2.0 web-based platform to communicate with other branches globally and provide cost-effective and technologically advanced services to its customers.

Singapore is a leading Southeast Asian economy today having one of the highest per capita GDP (PPP) in the world. This burgeoning economy has been party to Cognizant’s transformational services in several of its niche industries which include insurance, banking, manufacturing, retail and many more. Hence, Cognizant is highly exuberant about proliferating its hold even more on this vast economy through this new development center.

Cognizant reported its fourth quarter financial results of 2011 on February 8, 2012, whereby a whopping growth was observed. Revenues for the year rose around 33% annually to reach $6.12 billion, which marginally surpassed management’s expectations too.

Treading on the same path, management currently targets an annual revenue growth rate of 23% rise for 2012. It is lucid from its current advances that it has chalked out a clear path and is quite ‘cognizant’ about how to reach that goal which is highly laudatory considering the currently volatile fiscal scenario pervading across industries. 

The company appears to be in quite a formidable position to battle its competitors which include HiSoft Technology International , Bridgeline Digital, Inc. (BLIN) and Convio, Inc. . We currently have a Neutral recommendation on the company’s stock. Our view is supported with a Zacks #3 Rank which translates into a short-term rating of Hold.

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