Cognizant Technology Solutions Citi’s 2026 Global TMT Conference

No, thank you. Thank you for hosting us. I appreciate the opportunity. Yeah.

I think it's an interesting question to start. If you see, the industry has seen now more than a few years or 2 or 3 years of slow growth. In our assessment, it is partially the secular pressure, but it's also the lack of discretionary spend because, for example, in BFSI, Cognizant grew double digit in Q2, and that was notwithstanding the secular pressure because of AI-led productivity, and everything else that is going around the world. So I think it is some amount of secular pressure, but it is also largely the lack of discretionary spend in the rest of the sector, which is leading to a low growth phase for the industry as we see.

No, absolutely. The BFSI sector continues to be a robust performer, robust enabler, or robust driver for the growth for the sector and certainly for Cognizant. We have a slightly differing situation in rest of the sectors, and let me go one by one. On CMT, which is communication, media, and technology, we see excellent demand from technology customers. They understand this wave well, and they are investing in their future. We see excellent, almost as good a discretionary spend environment on technology side. But you do not see an overall growth there because communication sector and a couple of customers, specifically one that has impacted Cognizant, has sort of made the overall aggregate number more flattish. Products and resources are impacted by the geopolitical situation, where they are working through their supply chain.

There is a little bit overemphasis on today's operation versus investing on new technology or new spend. In some form, health is going through its own policy related predicaments or opportunities and challenges. We see these three sectors in a differing space of, or time as discretionary spend, so far as discretionary spend is concerned.

I would not say more recently. I think it is more of the same. The demand environment remains very similar to what we articulated on the earnings call. Only my hope is that as some of the impact of communication sector plateaus this year, and stabilizes, you should see a slightly better outcome on CMT in coming quarters. I do see that there is an opportunity out there on the CMT space better than what it has been in the past. It is not because the environment is changing, but a particular customer that impacted our performance in the first half is now more stable and will not create any more negative headwind for us.

Yeah, you can't say what would happen, but I don't see any of that on the horizon as we speak.

What I observed on the deal activity, including the large deals that Cognizant has signed over previous few quarters, is not whether it is incumbent versus a new player or a player from a new industry or something like that. I think the key differentiators have been your ability to demonstrate that you understand the use case or a large application of new technology like AI in a particular situation or a customer problem. Customer also look at which are the companies that seem to be the companies which are leaning forward and will be the companies of relevance in time to come, in next 3 or 4 years. So combination of your ability to problem solve a particular customer challenge and your ability to demonstrate that you would be that forward-leaning organization, not just now, but in coming years, is the sort of secret sauce of winning large deals.

Is there a pressure on incumbents? Yes, but it has always been that incumbents would always be challenged with an aggressive proposal from an outsider. At the same time, incumbents have the advantage of understanding the IT estate, which is more and more relevant. Most of the probabilistic solutions are AI plus context is equal to your answer, and ability of an incumbent to provide context is real, and it is a real advantage. So I would think incumbents are not that much as a risk as you hear in the sideline conversations.