CTS to set up STP in Chennai

CHENNAI: Chennai-based Cognizant Technology Solutions will invest $25 million

over the next three years on office space. The next 18-20 months will see its

300,000 sq. ft software technology park (STP) coming up in Chennai. "The

demand for office space is growing more than expected and we are unable to cope

with it. Hence in the process of consolidating our multiple development centers

in the country, we have decided to invest on real estate in the country. This

will enable us to have our own development centers," said N Lakshmi

Narayanan, President and Chief Operating Officer, CTS.

Besides five development centers in Chennai, it has one each in Calcutta and

Pune, which are either leased or rented. While some centers will be retained,

the rest will be consolidated. These plans were announced while presenting the

financial results for the first quarter ended 31 March, 2000. Revenue for the

first quarter of 2000 increased 33 percent to $27.1 million, from $20.4 million

in the first quarter of 1999. Non-Y2K revenue increased 77 percent from the

prior year period. Net income for the quarter ended 31 March 2000 increased 25

percent to $3.5 million, as compared to $ 2.8 million in the 1999 first quarter.

"This quarter marks the resumption of double-digit sequential revenue

growth as we end our Y2K transition," said Kumar Mahadeva, Chairman and CEO

and added, "Y2K business declined to 2 percent of revenue from 7 percent in

the fourth quarter of 1999 and 26 percent in the prior year quarter. We won a

number of new e-business deals, and the percentage of revenue from e-business

increased to 20 percent from roughly 10 percent in the fourth quarter of 1999.

Application management also contributed strongly to our revenue growth."