Cognizant’s Bold Move: Top 4 Revenue Growth Target by 2027 Shakes Indian IT Giants

Cognizant has set an ambitious goal to rank among the top four companies in revenue growth by 2027, directly challenging Indian IT leaders like TCS, Infosys, Wipro, and HCL Tech. At its Investor Day in New York, the company highlighted its progress in narrowing the revenue growth gap with competitors, reducing the deficit from 800 basis points in 2022 to just 50 basis points in 2024. To achieve its target, Cognizant plans to secure large deals, expand market share, and improve profit margins steadily over the next few years.

Analysts at Kotak Institutional Equities believe that AI adoption is gaining traction but is currently focused on enhancing efficiency and cost optimization. As AI evolves, new revenue opportunities will emerge, reshaping the IT sector and intensifying competition. Cognizant aims to strengthen its AI capabilities, expand in the Americas and EMEA regions, and leverage strategic partnerships for growth. Its aggressive pursuit of large deals and efficiency improvements could put pressure on Indian IT firms in the near term.

Meanwhile, Kotak has revised its stock ratings, maintaining a ‘Buy’ on Infosys and TCS, while downgrading HCL Tech and Wipro due to competitive challenges.

Cognizant’s Bold Move: Top 4 Revenue Growth Target by 2027 Shakes Indian IT Giants

Cognizant has boldly positioned itself against major Indian IT firms like TCS, Infosys, Wipro, and HCL Technologies, as well as global players such as Accenture, Capgemini, CGI, and Genpact. At a recent Investor Day event in New York, the company announced its goal of achieving one of the highest revenue growth rates in the industry by 2027. This move signals intensified competition not only with Indian giants but also with international firms like DXC, EPAM, and others.

Closing the Growth Gap

According to Nomura India, Cognizant has made impressive strides in narrowing its revenue growth gap with competitors. In 2022, the company lagged by 800 basis points (bps), where 100 bps equals 1 percentage point. By 2024, this gap had shrunk to just 50 bps. Cognizant now aims to outpace the industry average by 2025–26 through aggressive strategies: securing large contracts, expanding market share, and improving profit margins by 10–30 bps annually from 2025 onward. This three-pronged approach highlights its focus on scalability and operational efficiency.

AI’s Dual Role: Efficiency and Innovation

Kotak Institutional Equities notes that while AI adoption is rising, its initial impact is centered on cost reduction and efficiency gains. However, over time, advanced AI solutions are expected to unlock new revenue streams. The report also stresses that the IT sector’s competitive dynamics shift with each technological wave. Firms that struggled to adapt during past transitions (such as the shift to cloud computing) may face similar challenges in the AI era, potentially widening the gap between industry leaders and laggards.

Cognizant’s Strategic Playbook

To fuel growth, Cognizant is doubling down on AI innovation, targeting underpenetrated markets (regions with untapped potential) in the Americas, and selectively expanding in Europe, the Middle East, and Africa (EMEA). Strategic partnerships will also play a key role in enhancing its service offerings. By prioritizing large deals and leveraging AI to streamline operations, Cognizant could disrupt the market, pressuring Indian IT firms to accelerate their own AI investments and market strategies to remain competitive.

Stock Ratings Reflect Market Sentiment

Kotak Institutional Equities has updated its stock recommendations for Indian IT companies, reflecting these industry shifts:

• Infosys and TCS received ‘Buy’ ratings with target prices of ₹2,000 and ₹4,100, respectively, citing their strong market positions and adaptability.
• HCL Technologies was downgraded to ‘Reduce’ (target: ₹1,650) due to competitive pressures.
• Wipro faces a ‘Sell’ rating (target: ₹265) over concerns about its ability to navigate the evolving landscape.

These ratings underscore the varying capacities of firms to thrive in an AI-driven, competitive environment. Cognizant’s aggressive strategies could reshape the sector, pushing rivals to innovate rapidly or risk losing ground. As the IT industry enters a new phase of growth, companies that successfully balance AI integration with market expansion will likely emerge as leaders.