While Indian IT services firms such as TCS and Wipro have warned of a material impact due to the Chennai floods, Cognizant, the Nasdaq listed firm with a large operation in that city, has reaffirmed meeting its earlier stated revenue guidance for the year 2015. Cognizant has guided to a revenue of $12.41 billion for FY15 – the company follows the January-December fiscal – translating into an annual growth rate of 21%.
Chennai houses more than 60,000 employees spread across 11 development for the company. A statement from Cognizant said, “It expects to achieve both its previously announced full-year revenue guidance of at least $12.41 billion and its non-GAAP diluted EPS guidance of at least $3.03.”
The unprecedented floods in Chennai in the month of December had a major impact on the Indian IT services industry as the city is a major delivery hub but Cognizant claimed that the successful execution of its business continuity plan largely mitigated the financial impact of the flooding.
“Cognizant extends its gratitude to its employees, business partners, government agencies, and others involved in recovery efforts that helped in quickly bringing our business operations back to normal,” said Gordon Coburn, president, Cognizant.
TCS has said there would be a material impact in the third quarter of the current fiscal though it did not quantify. Similarly, Wipro said it is likely that its revenue would be in the lower half of its revenue guidance range for the third quarter of FY16. It has provided for revenue guidance of $1,841 million to $1,878 million for the December quarter.
Cognizant had also announced a committment of $40 million (Rs 260 crore) to help residents, its employees and business partners in Chennai with relief and rehabilitation in the aftermath of flooding. Out of this fund, $30 million (Rs 195 crore) is allocated towards its employees and business partners through direct grants and loans.