Core Viewpoint - Infosys Ltd's recent $1.6 billion NHS contract signals its competitive positioning against Cognizant Technology Solutions, potentially narrowing the revenue gap between the two companies [1][2]. Financial Performance - The revenue gap between Infosys and Cognizant decreased from $459 million at the end of the last fiscal year to $304 million by the end of the April–June quarter, with the new contract expected to reduce it further by $107 million [2]. - Analysts expect Infosys to achieve the fastest growth among the top five IT firms for the second consecutive quarter, driven by strong project delivery and minimal revenue leakages [3]. AI Strategy - Infosys is focusing on small AI models (SLMs) and has developed at least four tailored for various sectors, indicating a strategic push in AI capabilities [5]. - A dedicated 100-member steering committee has been established to identify AI opportunities, with AI now embedded in nearly all deals [6]. Growth Trajectory - The mega deal's revenue contribution is expected to ramp up next year, with management indicating growth from several large deals in the second quarter [8]. - Despite uncertainties regarding H-1B visas and potential outsourcing taxes, analysts predict the company's revenue guidance will remain unchanged at 1-3% for the full year [9]. Large Deals and Market Position - Infosys benefits from vendor consolidation trends, although macroeconomic uncertainties may impact discretionary spending [10]. - Strength in the financial services sector, which accounts for over 25% of revenue, is expected to help navigate uncertain demand [11]. AI Updates and Competitor Landscape - Investors are keen to see updates on AI initiatives, especially in light of significant investments by competitors like TCS and HCL in AI solutions [12]. - There is a focus on incremental revenue from AI-led solutions and whether Infosys will disclose specific AI revenue figures [13]. Operating Margins - Infosys has maintained operating margins of 20-21% through effective cost management and efficiency gains from AI initiatives [14]. - The company is leveraging its Project Maximus plan to sustain margins despite wage hikes and has reduced general and administrative expenses [14]. Global Capability Centers (GCC) Expansion - Infosys is enhancing its engagement with Global Capability Centers (GCCs) and has appointed dedicated leadership to this initiative [15]. - The company aims to not only source work from existing GCCs but also establish new ones, with management commentary on GCC engagements being closely monitored [16].

Core Insights - Infosys Ltd secured a $1.6 billion contract with the UK's National Health Service, marking its first major deal in two years and the fourth-largest under CEO Salil Parekh [1][3] - The contract involves managing the NHS Business Services Authority's back-end IT infrastructure for 15 years, expected to generate over $107 million annually until 2040, contributing a guaranteed 0.6% incremental revenue in FY26 [1][2] - This deal signifies a turnaround for Infosys, ending a drought in mega deals valued over $1 billion, with the last similar contract awarded two years ago [3] Financial Impact - The total value of the new contract exceeds $1.4 billion, representing 6.8% of Infosys's full-year revenue from the healthcare and life sciences vertical in FY25 [2] - Infosys concluded FY25 with a revenue of $19.28 billion, indicating a significant addition to its revenue stream from this contract [1] Competitive Positioning - The deal enhances Infosys's competitive position against Cognizant Technology Solutions, which was ahead by $304 million as of June 2025 [5] - CEO Parekh's leadership is highlighted as Infosys outperformed larger rival Tata Consultancy Services and smaller competitors HCL Technologies and Wipro in the first quarter [4] Industry Context - The contract is noted as one of the largest public-sector technology partnerships of the decade, reflecting growing confidence in Indian IT firms as long-term transformation partners [6] - The deal is part of a trend where major Indian IT outsourcers are securing large contracts after a period of uncertainty, with Infosys being the fourth to win a mega deal this year [6][7] Future Outlook - Infosys plans to develop a data-driven workforce management solution to replace the current Electronic Staff Record system, which manages payroll for 1.9 million NHS employees [5] - The company aims to leverage its experience in digital transformation and AI offerings to enhance NHS operations [9]

Core Insights - Cognizant Technology Solutions Corporation (CTSH) is a professional services company with a market cap of $32.1 billion, focusing on consulting, technology, and outsourcing services [1] - The company is expected to announce its fiscal third-quarter earnings for 2025 soon [1] Financial Performance - Analysts anticipate CTSH to report a profit of $1.29 per share for the upcoming quarter, reflecting a 3.2% increase from $1.25 per share in the same quarter last year [2] - For the full fiscal year, EPS is projected to be $5.15, an 8.4% increase from $4.75 in fiscal 2024, with further growth expected to $5.50 in fiscal 2026 [3] Stock Performance - CTSH stock has underperformed the S&P 500 Index, which gained 13.4% over the past 52 weeks, with CTSH shares down 11.7% during the same period [4] - The stock also lagged behind the Technology Select Sector SPDR Fund, which saw a 20.8% increase [4] Recent Earnings Report - On July 30, CTSH reported Q2 results, with adjusted EPS of $1.31, surpassing Wall Street's expectations of $1.26, and revenue of $5.3 billion, exceeding the forecast of $5.2 billion [5] - The company expects full-year adjusted EPS to be between $5.08 and $5.22, with revenue projected between $20.7 billion and $21.1 billion [5] Analyst Ratings - The consensus opinion on CTSH stock is moderately bullish, with a "Moderate Buy" rating overall; out of 23 analysts, six recommend a "Strong Buy," one a "Moderate Buy," and 16 a "Hold" [6] - The average analyst price target for CTSH is $87.47, indicating a potential upside of 32.9% from current levels [6]

Core Insights - Cognizant has been recognized as one of the World's Best Employers by Forbes for the third consecutive year, highlighting its commitment to employee satisfaction and organizational excellence [1][3]. Group 1: Recognition and Awards - The recognition as a top employer is based on an independent survey involving over 300,000 participants from 50 countries, who rated their willingness to recommend their employer and evaluated various aspects of employment [2]. - Cognizant's Chief People Officer emphasized that this award reflects the dedication of its global team and the company's focus on supporting employees and delivering value to clients [3]. Group 2: Company Overview - Cognizant (Nasdaq: CTSH) specializes in modernizing technology, reimagining processes, and transforming experiences for clients in a rapidly changing environment [5]. - The company has received multiple awards recently, including recognition as one of America's Greatest Workplaces and Most Innovative Companies [6].

Core Insights - Cognizant has announced a strategic collaboration with SmartestEnergy to enhance cybersecurity measures [1] - The partnership aims to deliver Managed Extended Detection & Response and 24/7 Managed Security Operations Centre capabilities [1] - SmartestEnergy is focusing on advanced cybersecurity to protect customer data and meet compliance demands as it scales operations internationally [1] Company Overview - SmartestEnergy is an energy company assisting businesses in the UK with the energy transition [1] - The company is investing in cybersecurity to counter sophisticated threats and safeguard its IT landscape [1] Industry Context - The collaboration reflects a growing trend in the energy sector towards enhanced cybersecurity measures amid increasing compliance demands and sophisticated threats [1] - As businesses transition to net zero, the need for robust cybersecurity frameworks becomes critical [1]

RT Matt Forney (@realmattforney)BREAKING NEWS: a whistleblower at Indian consulting firm Cognizant has revealed that they exist solely to help Indians cheat the immigration system and obtain citizenship.The whistleblower provided stats on the national origin of Cognizant employees. As you can see, 56 percent of Cognizant employees come from India. Moreover, he told me that the employees from the U.S., Canada, or the Netherlands are also Indians on visas. This means that roughly 75 percent of Cognizant emplo ...

Core Viewpoint - Cognizant Technology Solutions Corporation (CTSH) is considered a valuable investment opportunity in the AI sector, with recent upgrades reflecting improved fundamentals and growth potential [1][2]. Group 1: Company Performance - Ambit Capital upgraded CTSH from "Sell" to "Buy" due to the company's improving growth trajectory and performance that is comparable to or better than tier 1 peers [2]. - The company has achieved attrition rates similar to its peers, indicating enhanced operational efficiencies [2]. - Cognizant has experienced increased offshoring, reduced client churn, and improved capabilities in its software-as-a-service operations [2]. Group 2: Services Offered - Cognizant Technology Solutions helps businesses leverage AI and data to enhance decision-making, automate processes, and optimize operations [3]. - The company provides a comprehensive suite of services, including Generative AI, data management, and the deployment of AI-driven platforms like the proprietary Neuro AI Decisioning platform [3].

Core Insights - The US government's increase in H-1B visa fees and intensified scrutiny of offshoring practices pose significant challenges for Indian software services providers [1][3][12] Company-Specific Insights - Tata Consultancy Services (TCS) and Cognizant Technology Solutions are under scrutiny from US senators regarding their hiring practices, particularly concerning the replacement of American workers with H-1B visa holders [2][6][8] - TCS has announced layoffs of over 12,000 employees globally, including in the US, and is the second-largest beneficiary of H-1B visas, sponsoring 5,505 employees in FY25 [6][9] - Cognizant was found to have engaged in race-based discrimination against American employees, with a federal jury ruling against the company last year [8][9] Industry Insights - The local outsourcing industry, valued at $283 billion, is becoming increasingly vulnerable due to regulatory changes and scrutiny, particularly as Indian IT firms derive nearly 60% of their revenue from the US [3][12] - Proposed legislation, such as the HIRE Act, aims to increase costs for companies that offshore work, potentially impacting American firms more than Indian IT service providers [12][13] - The rise of AI technology is seen as a significant risk to Indian IT outsourcing firms, alongside the changing regulatory landscape [13]

Core Insights - Artificial intelligence (AI) is significantly transforming India's $283 billion IT industry, influencing both new deals and existing contracts [1] - Companies are increasingly revisiting contracts to seek greater AI-driven savings, with expectations for renegotiations to rise [2][3] Group 1: Impact on Contracts and Pricing - Cognizant's CFO indicated that historically, about 15-20% of contracts are renegotiated annually, with similar discounts typically passed to customers; this is expected to increase to 25% in the AI context, with productivity savings expectations rising to 20-25% [2] - Infosys' CFO noted that while generative AI may reduce project costs, the savings will likely be reinvested into new initiatives, indicating a shift in how savings are utilized [4] - Mid-sized firms like Hexaware Technologies are also experiencing cost compression in IT operations and software development due to AI, affecting both new and renewed deals [9] Group 2: Market Dynamics and Growth Projections - Analysts predict that AI will limit growth in the IT services market to a compound annual growth rate (CAGR) of 1.5%-3% from 2024 to 2029, driven by client hesitance to invest amid rapid AI advancements [12] - AI-led productivity gains are expected to impact existing IT services revenues by approximately 20% over FY25-30, while new growth opportunities may emerge later [12] Group 3: Workforce Implications - Major IT firms are already laying off employees due to productivity improvements driven by AI, with TCS announcing a reduction of 2% of its workforce, equating to 12,200 employees [13][14] - HCL Technologies has also indicated workforce reductions, particularly among employees not deployable on new projects, reflecting a broader trend in the industry [13][15] Group 4: Financial Performance - Cognizant, Infosys, and TCS reported fiscal-year revenues of $19.74 billion, $19.28 billion, and $30.18 billion respectively, with growth rates between 2% and 3.85% [7] - Since the launch of ChatGPT in late 2022, share prices of TCS and Infosys have decreased by 10.5% and 8.5%, while shares of Cognizant and HCL Technologies have increased by 8.8% and 28.7% respectively [8]

Core Insights - The new $100,000 fee for H-1B visa applications, introduced by the Trump administration, has raised market concerns but is expected to have limited operational impact on IT service companies [1][2] - Future legislative pressures may reshape the business models of the IT services industry, with companies likely prioritizing domestic hiring while maintaining offshore delivery to control costs [1][3] Group 1: Short-term Impact of New H-1B Policy - The new H-1B visa fee applies only to new applications submitted after September 22, alleviating initial market fears regarding existing visa holders [2] - Companies heavily reliant on H-1B visas, such as Cognizant (CTSH.US), experienced stock price declines, but the actual operational impact is deemed manageable in the short term [2] Group 2: Shift Towards Domestic Hiring - IT service companies, including Accenture (ACN.US) and Cognizant, are reducing their reliance on H-1B labor due to legislative pressures, with H-1B approvals for these companies expected to drop by 52% by 2025 [3] - The high visa fee is anticipated to encourage companies to hire domestically, as most required skills are available in the U.S. labor market, making local hiring more cost-effective despite potential salary increases [3] Group 3: Financial Implications - A stress test by Morgan Stanley indicates that if Cognizant maintains its H-1B approval volume of 2,500, the additional cost would be $250 million, representing 1% of revenue and approximately 7% of adjusted operating profit, although this scenario is considered extreme [4] - For Accenture, maintaining 1,600 H-1B approvals would result in an additional cost of $157 million, only 0.2% of revenue and about 1.4% of adjusted operating profit, indicating minimal overall impact on profitability [4]