In important news for the Indian IT companies, Nomura has maintained a ‘Buy’ rating on Cognizant with a target price of $97 per share. According to the brokerage, Cognizant is undergoing a strategic transformation aimed at accelerating growth, leveraging AI, and expanding its market share. The brokerage believes the IT major is on track to join the “winner’s circle” by 2027.
So, what makes Cognizant one of Nomura’s top IT picks? Here are four key reasons you need to know:
Nomura on Cognizant: To enter the “Winner’s Circle” 2027
According to the brokerage report, the company’s revenue growth gap versus peers improved from minus 800 basis points in 2022 to plus 50 basis points in 2024, and it now aims to outgrow the peer average in 2025-26.
The brokerage report states that Cognizant is positioning itself for “top-tier revenue growth and market share expansion by maintaining large deal momentum and delivering steady 10-30bp annual margin expansion over CY25-27E.”
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AI is at the core of Cognizant’s transformation, with the company adopting a three-pronged approach to drive growth such as hyper productivity, where the company has trained approximately 70% of its workforce on AI and has already saved efforts equivalent to 12,000 full-time employees. Currently, around 20% of its code generation is assisted by AI.
The second is industrialising AI which means that the company is localising, customising, and integrating AI into its platforms, with around 100 client deployments of its AI solutions.
The final one is Enterprise AI Adoption where it will be focusing on “agentifying enterprise AI”, which will give it access to “much larger tech spend pools of its enterprise clients.”
Nomura on Cognizant: Go-To-Market (GTM) strategy focusing on market expansion
The brokerage report highlights that the company has increased its large deal wins from 17 in 2023 to 29 in 2024.
According to the brokerage report, Cognizant’s “refreshed GTM strategy focusing on targeted domain offerings, large deals, talent investment, and strengthened solutions” has played a key role in driving its growth momentum.
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As per the brokerage report,
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