Cognizant top IT stock pick in 10 yrs

Bengaluru: Cognizant has had the best stock market performance among the IT services and BPM (business process management) firms globally in the past 10 years. The company’s share price rose by 364 per cent in this period.

Which means, if you had invested $1,000 in Cognizant a decade ago, the same would have been worth $4,648, according to calculations by IT consulting and research firm HfS.

At the No. 2 spot is Canadian IT services player CGI, whose scrip rose 363 per cent. CGI is followed by Accenture (328 per cent), TCS (212 per cent), Mindtree (209 per cent), HCL (208 per cent) and France-based Atos (158 per cent). After this are three pure-play BPM companies—EXL, Genpact and WNS, which grew 156 per cent, 125 per cent and 115 per cent respectively. For Infosys, it is just a 47 per cent increase, and for Wipro 27 per cent. Tech Mahindra, Fujitsu, HP and Unisys bring up the rear, according to HfS. The returns were calculated as of November. It takes into consideration HCL and Tech Mahindra’s share bonus and stock split.

Phil Fersht, CEO of HfS Research, said Cognizant has kept its competitors on the edge with competitive pricing, lower margins, and aggressive and effective sales. CGI has had a buildand-buy strategy, focusing on smaller contract wins, renewals, long term outsourcing contracts, coupled with acquisitions. Accenture’s success has much to do with its successful pivot into the new—digital cloud and security services that contribute to over 50 per cent of its revenue.