Cognizant Technology Solutions: Accelerated Growth In 2022; Multiple Expansion Possible: Nirmal Bang

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Nirmal Bang ReportCognizant Technology Solutions gave a 3-year (2021-2024) guidance: revenue CAGR of 8-11%, cumulative 3-year EBIT margin improvement of ~110bps over 15.4% that it will clock in 2021, FCF being 100% of net income and allocation of 50% of FCF to M&A compared to 28% TTM, implying lower capital return to shareholders. With an average ~200bps inorganic part indicated, organic CAGR in CC terms will be 6-9% during 2021-2024. Specifically on 2022, it was indicated that growth would be at the upper end of the guided range while margin improvement would be at the lower end. Assuming inorganic contribution of 200bps, this implies acceleration in growth to 9% (in organic CC terms) in 2022 from 6.5% in 2021. While CTS will likely underperform Tier-1 India heritage peers in terms of growth by ~800bps in 2021, we believe that the gap will narrow in 2022 to ~300bps if CTS delivers on its guidance and Indian companies slow down to low teen organic growth built into sell-side estimates for FY23. We believe that the margin differential will continue to be fairly high at 500-1000bps between CTS and its Tier-1 Indian peers even in the years ahead. .Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BloombergQuint.Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Cognizant Technology Solutions: Accelerated Growth In 2022; Multiple Expansion Possible: Nirmal Bang

Cognizant to see accelerated growth in 2022: Nirmal Bang

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