Beating the street once again, Cognizant reported a 22 per cent rise in net profit to $276.9 million for the September quarter compared to the same period last year, on the back of increased spending by clients.

This is the second consecutive quarter that has seen the company overtaking rival Infosys in terms of quarterly revenue. Cognizant’s revenue for the September quarter rose to $1.892 billion, up 18.2 per cent from $1.601 billion in the third quarter of 2011 and up 5.4 per cent sequentially.

The Nasdaq-listed software services giant also beat Tata Consultancy Services in quarterly revenue growth, while raising its full-year earnings forecast.

The company said its revenue for the year ending 2012 would grow at least 20 per cent to $7.34 billion, while revenue for the fourth quarter ending December this year is expected to be at least $1.94 billion.

“Our consulting-led approach, intimate client relationships and deep domain knowledge give us the confidence to deliver revenue growth of at least 20 per cent in 2012,” said Francisco D’Souza, Chief Executive Officer, in a statement.

Cognizant said, excluding stock-based compensation expense of $22.3 million, its non-GAAP operating margin was 20 per cent, in line with its targeted 19-20 per cent range.

According to R. Chandrasekaran, Group Chief Executive, Technology and Operations, adopting the “maximising market share over margins” route has helped the company.

“We believe we are in a recurring revenue business, which is why we place importance on market share. It’s why you see verticals such as financial services growing exceptionally well this quarter (7 per cent sequentially). We are still in the early stages of market penetration and this model is paying off well for us,” Mr. Chandrasekaran said.

There were 5,100 employees added this quarter, taking the global headcount to about 150,400 employees as of September 30, 2012. The company’s India rupee hedging programme was also extended to about $3.7 billion.

“Despite the recent appreciation of the rupee, we remain confident in our ability to maintain our non-GAAP operating margin. Our hedge programme helps mitigate the impact of such volatility on our operating margins,” said Karen McLoughlin, Chief Financial Officer, in a statement.

Shares of the New Jersey-based companyhave risen 5 per cent since the last quarter and closed at $67.35 on Tuesday on the Nasdaq.

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