Cognizant India IPO: IT Major ‘Exploring Options’ Amid Valuation Gap With Peers

Nasdaq-listed information technology services major Cognizant Technology Solutions Corp. is weighing options for an India listing as the stock continues trading at a discount to its India-listed peers.

In a post-earnings call with analysts, the company's chief financial officer, Jatin Dalal, said that Cognizant's management team regularly assesses opportunities to enhance shareholder value. "Towards this end, we have been assessing a potential primary offering and a secondary listing in India with our legal and financial advisors," he explained.

A comprehensive review is still in an early phase, Dalal said, and the company is engaging various stakeholders from both India and the US to evaluate the implications of such a potential offering and listing.

Dalal was answering a question about how, despite consistently improving performance, the stock is still at a significant discount to its peer group. To add some context, Cognizant's current price-to-earnings ratio of 14.07 is much lower than those of its India competitors. Within the Nifty IT index, Wipro Ltd.'s P/E is sitting at 18.75, and on the other end of the spectrum, Persistent Systems Ltd.'s P/E is at 55.46. Also, despite comparable revenues for fiscal 2025, Cognizant's market capitalisation is nearly half that of Indian bellwether Infosys Ltd.

The process of a primary offering and a secondary listing in India by an overseas company is complex and involves multiple steps. "We view this as a long-term project," the CFO added.

While no decision has been made and any offering and secondary listing would be subject to market and other factors, Cognizant, Dalal said, continues to assess and review the idea and is "committed to acting in the best interest of shareholders".

Cognizant was founded in 1994 in Chennai as Dun & Broadstreet's in-house tech unit. It started serving external clients in 1996, and, after a series of corporate reorganisations, it went for a Nasdaq listing in 1998.

The US-based IT major has a substantial number of employees in India and reported a 53% drop in net income for the third quarter to $274 million on Wednesday. The company was hit by a one-time, non-cash income tax expense of $390 million.

Revenue, however, rose 7.3% year-over-year to $5.42 billion for the quarter ended September 2025, driven by gains coming in from its investments into AI, and it has raised the lower end of the revenue growth forecast for the full fiscal year.

Cognizant raised the lower end of its full-year revenue growth forecast, pegging it at $21.05-21.10 billion, as against $20.7-21.1 billion earlier. For the fourth quarter, Cognizant expects revenues to be in the range of $5.27-5.33 billion.

Chief Executive Officer Ravi Kumar S said that the third quarter marks the company’s fifth consecutive quarter of year-over-year organic revenue growth and its strongest sequential organic growth since 2022.

Cognizant follows a January-December financial year.