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Cigniti Technologies Ltd.: Experts' corner
534758 CIGNITI Group (B) BSE data
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Management speaks
Sriram Rajaram
Sriram Rajaram
President ? Strategy & Corporate Development
Cigniti Technologies Ltd.
June 7, 2012, 2:37 pm
Why should an investor buy your company's stock?

Cigniti is India’s leading Independent Testing Services company and one of the rising stars in the Indian IT services industry. Our aim is to become the world’s largest Independent Testing Services company in the next three years through both organic growth and inorganic acquisitions. According to the latest Nasscom report, independent software testing services will continue growing at a CAGR of 16% till 2020, which makes it one of the fastest growing segments in the outsourced IT market. The addressable market for independent software testing is expected to grow from $30 Billion in 2010 to $50 Billion by 2020.

Cigniti offers superior value to our clients through premium services like IP led testing, Test Optimization Consulting, setting up Test Centers of Excellence and leveraging our test labs. Cigniti has built a great management team, proven delivery capability and advanced test labs to create compelling value for clients. These efforts will result in significant value addition to all our stakeholders.

What events do you expect in your industry sector over the next few months? Are these hurdles or catalysts?

The overall slow recovery of economies especially US and Europe is leading to slowdown in the growth of the IT industry. Enterprises are realizing that the best way to reduce costs is to leverage IT effectively reduce overall software development costs by focusing on software quality. Cigniti is well poised to take advantage of the need for enterprises to speed up software testing and do it efficiently. We believe that these events are a catalyst for our growth. This is being validated by the growth we are seeing in our business and increasing pipeline of clients wanting to outsourcing software testing to independent pure play testing vendors like Cigniti. The depreciation of the rupee to record levels are also helping us improve our margins in the short term but our investments in building IP will help us sustain the margins even as the rupee appreciates in the long term.

What growth initiatives has your company planned?

: Cigniti is investing in growth across various areas to reach our goal of being the world’s largest testing services.

 

Sales – Cigniti is expanding its sales team in the US and Latin America to reach out to more clients.

Marketing – Cigniti is investing in building our brand so that Cigniti becomes synonymous with testing. Having a strong brand will lead to better revenue growth and margins and improve our ability to attract the best talent to Cigniti.

Management – Cigniti has added more management depth with industry experts who bring a lot of experience and can add value to our clients.

Infrastructure – Cigniti is investing in Robotics Test Lab, Mobile Test Lab and Performance Test Labs that can be leveraged by our enterprise clients to improve their software quality without needing to invest in expensive infrastructure.

R&D – Cigniti is investing in building software testing tools, utilities and frameworks that help our clients speed up the process of testing while improving the overall quality of software.

Who is your competition? What differentiates you from them?

ANSWER: Cigniti competes with large and mid-sized IT services companies both in the US and India. Our key differentiators are

Test Consulting Services – Cigniti helps clients optimize their overall testing efforts, budgets, resources and test processes across the enterprise.

IP led testing – Cigniti has built tools, framework and utilities that help speed up the testing of software while improving test coverage.

Advanced Test Labs – Cigniti’s test labs enable clients to hit the ground running without needing to invest in expensive infrastructure.

Pure play testing services ­– Cigniti’s independence ensures that we are focused on software quality. Verification and validation is an activity that demands independence for it to be effective.

How do you see your company performing over the next financial year?

Cigniti is seeing significant sales traction in the US. We also hope to grow our business in Europe and Latin Americas this year. Our investments in IP, Branding, Test Labs and the management team is accelerating our growth. Cigniti declared consolidated income of INR 25.15 Crores and PAT of INR 3.72 Crores for the JFM quarter. We expect to maintain the momentum and grow significantly faster than the industry in the year 2012-2013.